Myriad Needs - QPG Solution!: 3M India Limited

SANSCO SERVICES - Annual Reports Library Services - www.sansco.
net
3M India Limited
Annual Report 2008
Myriad Needs.Qpg Solution!

3
SANSCO SERVICES - Annual Reports Library Services - www.sansco.net
3M INDIA LIMITED
REGD OFFICE : 48 - 51, ELECTRONICS CITY, HOSUR ROAD BANGALORE - 560 100
NOTICE
The 22nd Annual General Meeting of the Members of the Company will be held on Wednesday, the April 29, 2009 at Hotel
The Chancery Pavilion, 135 Residency Road, Bangalore 560 025, at 10.30 a.m. to transact the following business :
ORDINARY BUSINESS:
1. To receive, consider and adopt the Audited Accounts for the year ended December 31, 2008, together with the reports
of the Directors and Auditors thereon.
2. To appoint a Director in place of Mr. B.C.Prabhakar, who retires by rotation and, being eligible, offers himself for
re-appointment.
3. To appoint a Director in place of Mr. Richard Lee Becker, who retires by rotation and, being eligible, offers himself for
re-appointment.
4. To appoint Statutory Auditors to hold office from the conclusion of this Annual General Meeting until the conclusion of
the next Annual General Meeting and to authorise the Board of Directors to fix their remuneration. The retiring Auditors
M/s. Lovelock & Lewes, Chartered Accountants are eligible for re-appointment and have confirmed their willingness to
accept office, if re-appointed.
SPECIAL BUSINESS:
5. To consider and, if thought fit, to pass with or without modification(s) the following as an Ordinary Resolution:
"RESOLVED THAT pursuant to the provisions of the Articles of Association of the Company and the provisions of
Sections 198,269,309, 310,311, Schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956 (including
any statutory modification(s) or re-enactment thereof, for the time being in force), and subject to the approval of the
Central Government, consent of the Company be and his hereby accorded to the appointment of Mr. Ajay Nanavati as
Managing Director of the Company for a period of five years commencing from October 1, 2008 on the terms and
conditions including remuneration as under:
Salary including allowances, incentives and perquisites:
Salary including allowances and incentives (excluding perquisites) : Not exceeding Rs.15 lakhs per month.
Perquisites: Managing Director shall be entitled to all the perquisites listed herein below in addition to the Salary including
allowances and incentives mentioned above
Company Leased Accommodation: Furnished Company leased accommodation in accordance with the rules of the Company
as applicable to the senior managers.
Personal Accident Insurance: In accordance with the rules of the Company as applicable to the senior managers.
Club Fees: In accordance with the rules of the Company as applicable to the senior managers.
Company Car and Driver: The Company shall provide a car with the driver for business and personal use.
Telephone Facility at Residence: Telephone facility shall be provided as per Company policy applicable to the
senior managers.
The perquisites stated above shall be valued as per Income Tax Act, 1961, wherever applicable, and in the absence of any
provisions in the said Act, the perquisites shall be valued at actuals.
Minimum Remuneration: Notwithstanding anything herein above stated where in any financial year closing on and after
December 31, 2008, the Company incurs a loss or its profits are inadequate, the Company subject to the approval of Central
Government shall continue to pay the same remuneration as stated above but subject to being within the overall limits on
managerial remuneration as provided under Sections 198, 309 and other applicable provisions of the Companies Act, 1956
read with Schedule XIII to the said Act. The Board of Directors shall communicate the Central Government approval
including any revision in the terms of remuneration to Mr. Ajay Nanavati for his acceptance.
No sitting fees shall be paid for attending the meetings of the Board of Directors.
NOTES:
1. Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of the Special Business is annexed.
2. A member entitled to attend the meeting and vote is entitled to appoint a proxy and vote instead of himself and the proxy need not be a
member of the Company. Proxies should reach the registered office of the Company on or before 10.30 a.m. on April 29, 2009.
3. The Register of Members and the Share Transfer books of the Company will remain closed from April 23, 2009 to April 29, 2009
(both days inclusive).
4. Any change in the address of the members, including those held in dematerialized form may please be intimated to the Company's Share
Transfer Agents, Karvy Computershare Private Limited.
By Order of the Board
Date : February 27, 2009 K. Ramesh Chandra

Place : Bangalore Company Secretary
Explanatory statement u/s 173 (2) of the Companies Act, 1956
FOR RESOLUTION NO. 5
Mr. Ajay Nanavati is a Bachelor in Chemical Engineering and has a rich experience in various industries, spanning over 30 years.
He has held various senior positions in 3M Company, USA and in other 3M subsidiaries over the last 22 years of his career
in 3M Group.
Upon the recommendation of 3M Company, USA, your Board of Directors at its meeting held on September 10, 2008 appointed
Mr. Ajay Nanavati as a Director representing 3M Company and also as the Managing Director of the Company on the terms of
remuneration set out in the ordinary resolution. Mr. Ajay Nanavati took the position as Managing Director of the Company with
a rich experience.
Mr.Ajay Nananvati holds 3,422 shares in the Company and does not hold directorships / memberships in any other Company.
He is a member of Company's Shareholders' Grievance Committee.
No Director other than Mr. Ajay Nanavati may be deemed to be interested or concerned, in this regard.
The abstract of the terms of contract and memorandum of interest as required under Section 302 of the Companies -Act, 1956
was circulated to all the members of the Company.
The Board accordingly recommends the resolution as set out in Item no.5 for approval of the members.
Additional information on Directors seeking re-appointment at the Annual General Meeting
Name of Director Mr. B.C. Prabhakar Mr. Richard Lee Becker
Age 65 Years 49 Years
Qualifications Bachelor of Arts and Bachelor of Law Master of Business Administration
Expertise Expertise in legal Finance and taxation
Directorships held in other Public Wipro Limited Nil

Companies (Excl. Foreign and Automotive Axles Limited
Private Companies)
Memberships/Chairmanships of Wipro Limited

committees across Public Automotive Axles Limited Nil
Companies
Shareholding of Directors Nil Nil
By Order of the Board
Date : February 27,2009 K. Ramesh Chandra

Place : Bangalore Company Secretary
'Celebrating Diversity.
Pride in Unity.'
A soeiety of enduring^differenees. Difference of Culture, Costume, Cuisine, Caste, Creed, Colour, Conviction
and Custom. Yet a Nation with one soul.
India's constitution recognizes 22 languages, and then there are the numerous dialects. Home to every religion
known to mankind. Blessed with snow-clad mountains, sun-drenched beaches and everything in between.
Abode of diverse cultures and an astonishing range of colors. India was never truer to herself when celebrating
her own diversity.
In multifarious ways, 3M perfectly complements Indian Diversity. From facilitating safety on the road to
enhancing the beauty and effectiveness of vehicles, from deploying solutions for the Oil & Gas and
Telecommunication sectors to helping individuals get organized. From stepping up the standards of Indian
healthcare to making life beautiful with an array of home products. 3M truly complements the diversity of India,
in more ways than one.
India. One land embracing many. 3M. One brand serving many.
f i
Contents
Message from the Chairman 2
Message from the Managing Director 3
Report of the Directors 11
Management Discussion and Analysis 14
Report of the Corporate Governance 18
Auditor's Report 29
Annexure to Auditor's Report 30
Balance Sheet 32
Profit and Loss Account 33
Schedules to Accounts 34
Notes to Accounts 40
Cash Flow Statement 53
Registered Office Corporate Office

Plot No. 48-51, Electronics City Concorde Block, UB City
Hosur Road 24, Vittal Mallya Road
Bangalore - 560 100 Bangalore - 560 001
Tel : 080 - 28520203 Tel : 080-22231414
Fax : 080 - 28520576 Fax:080-22231450
SANSCO SERVICES
ur
\i i°
Vaues
Act with uncompromising honesty and integrity in everything we do.
Satisfy our customers with innovative technology and superior quality, value and service.
Provide our investors an attractive return through sustainable, global growth.

/ ,-—
Respect our social and physical environment around the world. j
j
Value and develop our employees' diverse talents, initiative and leadership.
i
Earn the admiration of all those associated with 3M worldwide. 1
Mess
This would be the first
Meeting of the
shareholders I would
be presiding after I
assumed responsibility of this august position in September 2008, from the outgoing Chairman Mr. Thomas P.
Spencer and I look forward to dutifully fulfilling the same.
3M India also has a new leader at its helm, with Mr. Ajay Nanavati taking over from Mr. Bert O' Donoghue. I would
like to acknowledge Mr. Bert O' Donoghue's leadership in taking the Indian company to its current position of
being one of the fastest growing subsidiaries in the 3M World. Mr. Ajay Nanavati has a wealth of experience in
3M and will prove to be a worthy successor in taking 3M India to the next level.
The year ended December 31, 2008 was a year of mixed fortunes for us. Amidst the global financial crisis which
has hit governments, organizations and people from all walks of life alike, I'm happy to report that 3M India has
been able to maintain its topline growth. The profits however were lower than the last financial year mainly
because of a change in product mix and lower margins. This clearly demonstrates that we have the ability and
discipline to survive and thrive in this current challenging environment.
Exploring new markets and opportunities and transforming ideas into innovative products that are intuitive to local
customer needs have helped us deliver during these tough times and these strategies will continue to keep our
momentum going in the coming year. The company also expended substantial capital expenditure during the year
by setting up new facilities at Pune and undertaking expansion of capacity at its Ahmedabad plant.
I have to mention that 2008 was a significant year in 3M India's history as the company crossed a major milestone
- 20 years of innovation in India. I would like to applaud the leadership as well as all our 3M India employees who
have shaped 3M India's path of progress this far.
There is no doubt that 2009 is going to be a tough year for us. An unprecedented global recession has descended
upon us. World leaders, institutions and the business community globally are working towards surviving this
meltdown. Our diversified businesses and strong foundation has enabled us to withstand such economic storms
in the past and we will continue to strive to ensure that we rise above this
crisis and follow our goals of attaining global leadership in markets,
products and manufacturing processes.
I would like to remind everyone that we are poised to take on the

challenges and the market opportunities offered by the current environment
and we will emerge competitive and stay focused on our vision to be the
most innovative enterprise globally. In these turbulent times I am confident
that we can rely on the 3M culture, our values, and our way of working and
looking at the world to meet the challenges in the years to come.
D. J. Balaji Rao
Chairman
SANSCO SERVICES - Annual Reports Library Services -
We enter the new financial year in turbulent times. 2009 offers tough
challenges as we come off a year that started off very well for us but ended
with a tough last quarter.
Despite the economic slowdown that set in, in mid 2008, your company ended
the year with a net sales increase of 21%, in line with our expectations. We
were able to register this commendable growth, because of your company's
diversified product portfolio and excellent results from the Health Care and
Display & Graphics businesses. Though we did an excellent job of managing
costs and increasing prices, this was not enough to offset the rapid decline of
the Indian rupee and it, in turn, adversely impacted our bottomline.
Our technology is focused on meeting local needs. Hence, localization has

been the key theme of your company's operations in 2008 and we have made
some strides with the development of products like the 3M™ Dust Free
Ventura Adaptor and the 3M™ Pavement Markers, to name a few. It was also
the first year when we made significant investments in developing our manufacturing capabilities which were
wholly funded by your company's internal operations. I'm delighted to inform you that our new manufacturing facility
at Ranjangaon, Pune has started its commercial operations with its first commercial dispatch of a locally developed
tape product (DC Tape 9109) from the Industrial Tapes division. The expansion of our facility at Ahmedabad is also
making steady progress. These developments will be key to our growth in the years
ahead.
Message
romthe _
Your company also completed 20
successful years in India in 2008. For the
past 20 years, 3M India's growth has
Managing
i i MM ^^ I^%X% V IX^^"
been steady and upward and today we
are one of the most admired companies
in India.
Director I applaud & congratulate 3M employees

who have raised their bar of excellence
and continued to take 3M India to what it
is today. Your company has also been continuously focusing on people and processes to build leaders who can
tide over these challenging times. Testament to this is that 3M Company was recently ranked as the No.1
Company in its list of 2008 Best Companies for Leaders in a survey conducted by The Chief Executive Magazine.
I would like to thank my predecessor, Mr. Bert O'Donoghue, from whom I took over the reins of the company in
October 2008, for handing over a strong company well on the path to growth. I'd also like to thank our Board of
Directors for their continued support. Mr. Thomas P. Spencer resigned as Chairman of the Board in 2008 and I
would like to thank him for his support and encouragement of all our efforts in India. I welcome Mr. D. J. Balaji Rao
who has been appointed as our Chairman. We look forward to his inspired leadership and continued support for
the challenges we have ahead.
Ajay Nanavati
Managing Director
.sansco.net
One Solution. 3M
India is the land of diversity. Truly multi-ethnic, multi-lingual and multi-religious. But driven by one spirit. The
unfailing spirit of oneness, the spirit of Unity. 3M India is a perfect match for India's multifaceted customer profile.
While our products serve distinct markets, they are guided by one over riding philosophy; to help our customers
succeed.
The ubiquitous diversity is common not only to India, but also to 3M. Indian roads, industries, homes & offices are
bedecked, sustained & facilitated by 3M products.
Let's take a tour of India; onto the roads first. Those bright road safety signs that you see there? Those are 3M
products. Vehicles on the road are enhanced with 3M products for performance, appearance and maintenance.
If those exciting car graphics grab your attention, small wonder they are 3M products. Those towering buildings
out there are certainly attention grabbing. From the outside to the inside 3M enhances their functionality & safety,
with a range of solutions for the construction market.
You see an Industrial plant? 3M is a part of the Industrial process with processes as varied as grinding, bonding,
masking, packaging, fluid filtering and more. This apart, 3M has products to enhance worker safety. And not to
forget the Oil & Gas Industry where 3M caters to exploration, production, transportation, refining, marketing and
employee safety.
Have you observed the number of new hospital chains that are coming up? 3M helps step up the quality of Indian
healthcare. Clinics, hospitals, medical practitioners and food safety companies benefit from a wide range of
3M products. Oh! These malls look so attractive. The product showcase is amazing; thanks to 3M's graphic
solutions.
Now let's step into an office. 3M's Post-il® and Scotch® brands have revolutionized communication at the
workplace. There has been a sea change in the way business is done. The telephone and the internet have
revolutionied business efficiency. However, Indian telecommunications is still at an evolving stage. 3M offers a
comprehensive suite of scalable solutions to telecom service providers.
3M enhances power utility functions too. It caters to sealing, connecting, terminating, shielding and insulating
applications even under extreme conditions. Finally, we are at home. Here life is beautiful, easy & manageable with
a slew of 3M's Scotch Brite® products like cloths, sponges, scrub pads, hand held cleaning tools for homes.
A diverse nation. A truly diverse company serving its millions. Touching their
lives; be it at home, office, in a hospital or on the road.
A strong sense of
localization driven by
the vagaries of Indian
conditions and the
versatile customer
profile that India offers.
Raised Pavement Markers Median Markers
3M designed them keeping in Keeping Indian traffic
mind product durability for conditions in mind, 3M's
high traffic conditions of the Median Markers are tough,
Indian market. vandal-proof, dirt-resistant and
retro-reflective providing
highest visibility to the
road-medians at nights.
Brand Owner Services

End to end solutions (from
Diverse
Challenges.
design to execution) for
Brand Identity Programs;
including Facility Signs,
Promotional Graphics, Rear
Projection on Glass, Fleet
Unique
Graphics and Ambient
Graphics. Answers, Rubber Adhesive
An indigenously developed
Rubber Adhesive used for
bonding vinyl sheets and
wood laminates to meet
the local operating and
processing environment.
Fiber Management System

Polymer Processing Additives (PPA) 3M's Fiber Management
This locally manufactured System is customized
PPA for resin producers keeping in mind the unique
and compounders has product requirements of
been developed keeping Indian Telecom Operators.
local requirements such as
logistics, price and quality
in mind.
Unique Dust Free Sander Health Care Products
Dust Free Sanders, for dry 3M has developed a range
sanding of cars, developed of locally produced
using the 'Ventura' disinfectant and cleaning
technology features an solutions, keeping in mind
adaptor with a dust collection health care practices in
bag making the process less Indian hospitals.
tedious and less messy.
SANSCO SERVICES - Annual Reports bito
India, a civilization more than five thousand years old. 3M, a company of 75,000 people with a century
old history.
India. One of the most ethnically diverse countries in the world. 3M. One of the most diversified
companies in the world serving various ethnicities.
50,000 products globally and 5,000 products for the Indian markets.
For the last 20 years, every one of these products have

offered a solution or two for a business or personal need
of the Indian consumer. Our offices and facilities, spread
across the length & breadth of the Indian Sub-continent
ensure that wherever the customer may be; 3M is not far
away. And serving the heterogeneity of India are the
people at 3M who are as diverse as the markets they
serve. From Chandigarh up North to
Cochin down South and from Rajkot in
the West to Kolkata in the East, you will
Diversity.
find a 3M representative speaking your
language, addressing your need.
The 1100+ army of 3M India

professionals have just one target - earn the loyalty of the Indian Consumer. Our Technology, our Innovation
and our People are focused on meeting this.
3M in India. A Microcosm of 'Unity in Diversity'.
7
SAIN SCO SERVICES - Annual Reports Library Services - www.sansco.net
DIRECTORS Mr. D.J. Balaji Rao Chairman

Mr. Ajay Nanavati Managing Director
Mr. B.V. Shankaranarayana Rao Whole-time Director
Mr. Thomas P. Spencer Director
Mr. B.S. Iyer Director
Mr. B.C. Prabhakar Director
Mr. Richard Lee Becker Director
COMPANY SECRETARY Mr. K. Ramesh Chandra

AUDIT COMMITTEE Mr. B.S. Iyer Chairman
MEMBERS Mr. D.J. Balaji Rao

Mr. B.C. Prabhakar
Mr. Richard Lee Becker
SHAREHOLDERS' Mr. D.J. Balaji Rao Chairman

GRIEVANCE COMMITTEE Mr. B.S. Iyer
Mr. B.C. Prabhakar
Mr. Ajay Nanavati
BANKERS Citibank N. A.
BNP Paribas
Canara Bank
Deutsche Bank
HDFC Bank
Hongkong & Shanghai Banking Corporation Limited
ICICI Bank Limited
State Bank of India
AUDITORS M/s. Lovelock & Lewes, Chartered Accountants
LEGAL ADVISORS J. Sagar Associates
Advocates & Solicitors
4121/B, 19 'A' Main, 6th Cross
HAL II Stage Extension, Bangalore - 560 038
SHARE TRANSFER AGENTS Karvy Computer Share Private Limited
Plot no. 17-24, Vithal Rao Nagar,
Madhapur; Hyderabad - 500 034
Tel: 040-23420816 / 824 Fax: 040-23420814
E-mail : mailmanager@karvy.com
WEBSITE www.3m.com/in
INVESTORS' QUERIES 3mindia.investorshelpdesk@mmm.com
8
SANSCO SERVICES - Annual Reports Library Services - www.sansco.riet
SANSCO SERVICES - Annual Reports Library Services - www.sansco.net ,
3M India Limited
This page is intentionally left free
10
Annual Report 2008
REPORT OF THE DIRECTORS

Your Directors have the pleasure in presenting to you their 22nd Annual Report and Audited Accounts for the year ended
December 31, 2008.
FINANCIAL RESULTS
(Rs. in lakhs)
Particulars For the year ended For the year ended

December 3 1,2008 December 3 1,2007
Total Income 75,240.48 61,905.47
Less : Total Expenditure 65,415.28 50,653.40
Profit before Depreciation 9,825.20 11,252.07
Less : Depreciation 722.92 589.22
Profit before Taxation 9,102.28 10,662.85
Less : Provision for Taxation 3,356.79 3,894.57
Profit after Taxation 5,745.49 6,768.28
COMPANY PERFORMANCE
The Company has recorded a good topline performance during the year under review. The total income was at Rs.75,240.48 lakhs for
the year ended December 31, 2008 as against Rs.61,905.47 lakhs for the same period during the previous year. This represents an
increase of 21%, a commendable growth rate considering the existing economic downturn.
Profit after taxation was at Rs.5,745.49 lakhs for the year ended December 31, 2008 as against Rs.6,768.28 lakhs for the same period
during the previous year. Slow down in the economy, rupee depreciation against all major currencies and change in business mix
compared to the previous year, significantly impacted the profitability.
DIVIDEND
In view of the execution of investment plans towards the expansion of our existing manufacturing facilities as well as towards
product localisation projects, it has been decided to conserve and retain our earnings.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments that occurred affecting the financial position of the Company between
December 31, 2008 and the date on which this report has been signed.
DIRECTORS
Mr. Thomas P. Spencer resigned as Chairman and in his place Mr. DJ.Balaji Rao has been appointed as Chairman of the Company.
Mr. Bert O' Donoghue resigned as Director and Managing Director and in his place Mr. Ajay Nanavati has been appointed as Director
and Managing Director.
The Board places on record their sincere appreciation for the services rendered by Mr. Bert O' Donoghue during his tenure as
Managing Director.
Mr. B.CPrabhakar and Mr. Richard Lee Becker are retiring by rotation at the ensuing Annual General Meeting and being eligible, they
have offered themselves for re-appointment.
DIRECTORS'RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors Responsibility
Statement, your Directors state:
i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper
explanation relating to material departures;
11
3M India Limited
ii) That they have selected such accounting policies and applied them consistently and made judgments and estimates that
are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company and of its profits for the
year ended December 31, 2008;
iii) That they have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance
with the provisions of this Act, to safeguard the assets of the Company and to prevent and detect fraud and other
irregularities;
iv) That they have prepared the financial statements for the year ended December 31, 2008 on a going concern basis;
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with stock exchanges, a separate section titled "Corporate Governance" has been
included in this year's annual report, along with the report of Management Discussion and Analysis and additional shareholder
information.
FIXED DEPOSITS
During the year under review, the Company has not accepted any deposits under Section S8A and 58AA of the Companies Act, 1956
read with the Companies (Acceptance of Deposits) Rules, 1975.
AUDITORS
M/s. Lovelock & Lewes, Chartered Accountants, Bangalore Auditors of the Company will retire at the conclusion of the ensuing
Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received a certificate from the
Auditors to the effect that their re-appointment, if made, would be in accordance with Section 224(16) of the Companies Act,1956.
CONSERVATION OF ENERGYJECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules, 1988 have been enclosed as Additional Information and forms an integral part of this Report.
LISTING
The shares of your Company are presently listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India
Limited (NSE). The delisting application has been filed with the Calcutta Stock Exchange Association Limited and the formal approval
is awaited.
PERSONNEL
The Board wishes to place on record its appreciation to all employees in the Company, for their sustained efforts and immense
contributions to the good levels of performance and growth that your Company has achieved during the year.
PARTICULARS OF EMPLOYEES
The Annual Report and Accounts are being sent to all the shareholders of the Company without the statement of Particulars of
Employees under Section 217 (2A) of the Companies Act, 1956 read with (Particulars of Employees) Rules, 1975. Members who are
interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.
ACKNOWLEDGEMENT
Your Directors wish to place on record their sincere appreciation for the continued support and valuable co-operation extended by
all the stakeholders of 3M India Limited. The Directors also wish to express their gratitude to all the shareholders for the faith that
they continue to repose in the Company.
On behalf of the Board of Directors
Place : Bangalore AjayNanavati B.V.Shankaranarayana Rao

Date : February 27, 2009 Managing Director Whole-time Director
12
Annual Report 2008
ADDITIONAL INFORMATION AS REQUIRED UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956 READ WITH COMPANIES
(DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988
A. CONSERVATION OF ENERGY
The Company plant engineering team periodically reviews and monitors energy consumption and significant savings made
during the previous year under review. No additional investments were made or implemented, for reduction of energy consumption
during the previous year.
B. TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT

1. Specific areas in which Research & Industrial Markets : Pressure sensitive adhesives development
Development carried out by the Company for tape and label products for industrial and converter markets,
new tape coaler installed and operational for production. Water-
based glue development for Wood and Utility markets. Abrasive
discs development for metal working markets. Polymer
processing aides developed for polyolefin manufacturers
and processors.
Specialty Materials Markets: Coatings for corrosion protection of
pipelines, brand & asset authentication labels to prevent product
counterfeiting, RFID based solutions for library systems.
Consumer Office Markets: Floor, Kitchen, utensil & cleaning
solutions - wipes, scrubbers, mops. Repositionable notes, stationery
products and tapes.
Automotive Markets: Automotive graphics, attachment tapes for
automobiles, paint replacement films, and automotive aftermarket
formulations for car detailing and body work.
Healthcare Care Markets: Wound dressings, cleaning infection
prevention products for use in hospitals:
Traffic and Safety Markets: Signage systems, traffic safety
products including median markers and toll plazas:
2. Benefits derived as a result of the above New applications development.
Research & Development Reduced cost solutions for our customers and end users.
Business growth.
3. Future plan of action Continue localisation of products.
Development of products specific for Indian market needs,
especially in the areas of Corrosion Protection, Automotive,
Industrial, Medical and Consumer markets.
4. Expenditure on Research & Development (Rs.in Lakhs)
a) Capital 147.57
b) Recurring 70.36
c) Total 217.93
d) Total Research & Development expenditure
as a percentage of total turnover 0.29%
C. FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year, the Foreign Exchange earnings were Rs.438.83 lakhs and Foreign Exchange Outgo was Rs.1,123.69 lakhs.
Place : Bangalore Ajay Nanavati B.V.Shankaranarayana Rao

13
3M India Limited
Investors are cautioned that this discussion contains statements that involve risks and uncertainties. Words like anticipate,
believe, estimate, intend, will expect and other similar expressions are intended to identify such forward, looking statements.
The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of
any subsequent developments, information or events. Besides, the Company cannot guarantee that these assumptions and,
expectations are accurate or will, be realised and actual results, performance or achievements could thus differ materially from
those projected in any such forward looking statements.
MANAGEMENT DISCUSSION AND ANALYSIS

3M India Limited is a diversified manufacturer, technology innovator and marketer of a wide variety of products. 3M continues to
manage its operations in five business segments; Industrial Markets; Automotive & Specialty Materials Markets; Health Care Markets;
Traffic and Safety Markets; Consumer & Office Markets, Construction Markets. 3M's five business segments bring together common
or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of
business resources. The Management of the Company presents the financial information and other disclosures relating to
3M's business segments.
a) INDUSTRY STRUCTURE AND DEVELOPMENTS
The Indian economy, like the rest of the world is showing signs of an economic slowdown, with weaker industrial production
growth, manufacturing and exports. Growth is expected to slowdown further in 2009 as the liquidity crunch and the global
slowdown will drive down business confidence and personal spending. Real GDP growth has also slowed down during the last
few quarters which is a far cry from the double-digit growth rates seen in the second half of 2006 and the first half of 2007.
This downturn in the economy, currency fluctuations and GDP growth will all have significant effect on the Company's
performance The Company continues its focus on Industrial Segments due to its technological advantage of products.
b) OPPORTUNITIES AND THREATS
The Company faces normal market competition in all its businesses, from Indian as well as international companies.
3M's globally competitive cost positions and well crafted business strategies have enabled it to retain its leading market
positions. 3M strongly believes in its brand equity.
c) SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE
INDUSTRIAL MARKETS
The Industrial Markets Segment includes products like paper tapes, coaled and non-woven abrasives, and specialty
adhesives. Major industrial product applications range from grinding, surface conditioning and super abrasives for
packaging systems.
Rs. in lakhs
31.12.08 31.12.07
Financial Highlights Segment Revenue 13,615.68 11,314.26

Profit before Interest & Tax 1,168.28 1,924.24
Capital Employed 4,631.58 2,259.90
Highlights The Industrial markets grew by 20% in 2008 and this growth was mainly driven by:
Entry in the high volume retail segment with specific product line.
The growth in sales which is attributed to new account penetration and organic growth.
Continuous development and implementation of specific programs focused on markets
like Construction Components, Automotive, Auto-Parts, Metal Fabrication, Stainless Steel,
Energy and Industrial Utility.
14
Annual Report 2008
AUTOMOTIVE & SPECIALTY MATERIALS MARKETS
Automotive and Specialty Materials Markets provides a wide range of design and engineered solutions to Automotive OEM's
and ancillary industries, corrosion protection and glass bubbles solutions for oil & gas pipelines etc. This segment includes
a wide range of automotive repair and car grooming solutions for the Automotive Aftermarket. 3M is acknowledged as an
innovative supplier of solutions and is a market leader in the non-paint consumables segment in the Automotive-Aftermarket
space. 3M is also a pioneer in the car care business and is forging partnerships with the majority of car dealerships by way of
Automotive OEM approvals.
Rs. in lakhs
31.12.08 31.12.07

Capital Employed 13,56838 7,660.94
Highlights The Automotive and Specialty Materials Markets grew by 15% in 2008 and its growth
was driven by:
The focus on Automotive Aftermarket for growth to compensate for slow growth in the
Automotive Industry.
The growth in sales which was achieved by the change in the product mix and with
the introduction of new products.
The various new oil and gas pipeline projects that came up in 2008 which helped in
the growth of the Corrosion Protection Products Division. Products from the
Corrosion Protection Plant at Ahmedabad, which support the pipeline manufacturing
industry, were introduced with a dual layer of coating that provided significant
benefits to our customers, both in terms of cost and productivity.
HEALTH CARE MARKETS
3M Healthcare is a global leader offering innovative products and solutions for Skin & Wound Care, Infection Prevention,
Dental, Orthodontic, Drug Delivery and Food Safety Markets. Our products enhance the practice, delivery, and outcome of
health care by providing innovative solutions and improve patient's lives.
Rs. in lakhs
31.12.08 31.12.07

Profit before Interest & Tax 430.40 294.97
Highlights Healthcare Business grew by more than 50 % in 2008. Some of the key
drivers of growth were
Continued focus and efforts on knowledge transfer and sharing with customers. This
was achieved through successful Indian and International KOL speaker programs and
seminars etc.
Continued value enhancement for customers through new initiatives like formation
of critical care nurses club and operating room nurses club etc across the country.
Successful launch of new products like handrub, disposable drape packs and express
XT impressioning system.
Entry into the dental lab and digital market with the launch of lava crowns.
Success in the drug delivery component supplies business to pharmaceutical
companies in India.
15
3M India Limited
TRAFFIC AND SAFETY MARKETS
The Traffic and Safety Markets segment serves markets that include electronic display, traffic safety, commercial graphics,
security and protection services. Major products include commercial graphics systems, reflective sheeting for transportation
safety, optical films, solutions for electronic displays, occupational health and environmental products, passport readers and
computer screen filters.
Rs. in lakhs
31.12.08 31.12.07

Highlights The Traffic and Safety Market grew by 20% in 2008 and this growth was mainly driven by :
The Company's Commercial Graphics Division which continues to be the preferred supplier
of commercial fascia signage material to several large corporations and the banking Industry.
In 2008, the growth was driven by big orders from banks.
Expansion of the road network at the national and state levels which resulted in
continued demand for the Company's reflective sheeting products for traffic signage.
During the year, the Company's Occupational Health & Environment Safety Division
further strengthened its leadership position as the preferred supplier of respiratory and
hearing protection products to the Indian industry.
CONSUMER & OFFICE MARKETS, CONSTRUCTION MARKETS
This segment offers an array of products that help keep homes cleaner, offices organized and buildings maintained. This
business segment features some of the world's best-known brands, from Scotch®, Scotch-Brite® to Nomad™ and Posl-it ®.
Rs. in lakhs
31.12.08 31.12.07
Capital Employed 530.29 787.87
Highlights During the year 2008, the segments grew by 16% and this was driven by :
- The Home Care and Office Supplies Division which achieved growth by expanding
geographical reach and by expanding the product range.
- The expansion of the Modern Trade in tier A / smaller cities which also helped 3M in
achieving higher growth levels.
- Portfolio extension by introducing new range of Nomad™ modular matting and Prestige
Sun Control films.
- The focus on renewable energy opportunities with 3M window film products.
OTHERS
Rs. in lakhs
31.12.08 31.12.07
Financial Highlights Segment Revenue 422.85 397.60

Capital Employed - -
16
Annual Report 2008
d) OUTLOOK
Depreciating rupee, industrial production and weaker global demands have put pressure on the overall economic growth.
However, the Company will continue to strive to attain global leadership in markets, products and manufacturing processes.
Technology will be the key to success and products that respond to local market needs will need to be introduced at a fast pace
on a regular basis.
Forward looking statements are based on certain assumptions and expectations of future events that are subject to risks and
uncertainties. Actual future results and trends may differ materially from historical results, depending on a variety of factors.
e) RISKS AND CONCERNS
All key functions and divisions of the Company are independently responsible to monitor risks associated within their
respective areas of operations such as production, treasury, insurance, legal and others areas like health, safety and environment.
The Company's high levels of integration, globally competitive operations and domestic leadership position have helped it in
mitigating the adverse impact of generic industry risk factors. Foreign exchange rate volatility has also had an impact on the
business. The Company has identified various risks and procedures to mitigate the same.
f) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate systems of internal control in place. This is to ensure that assets are safeguarded against loss from
unauthorized use or disposition, and that transactions are authorized, recorded and reported correctly. The Internal audit
function is empowered to examine the adequacy, relevance and effectiveness of control systems, compliance with policies,
plans and statutory requirements. The top management and the Audit Committee of the Board review the findings and
recommendations of the internal audit panel.
The Internal Auditor functionally reports to the Audit Committee and administratively to the Managing Director. The Audit
Committee periodically reviews the audit plans, audit observations of both internal and external audits, risk assessment and
adequacy of internal controls. The Company has developed adequate internal control systems commensurate to its size and
nature of its business. Reports of the Internal Auditor are submitted to the Management and Audit Committee. The Statutory
Auditors also review their findings with the Senior Management and the Audit Committee.
g) DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS
The Company believes that consistent employee performance and overall satisfaction and engagement will lead to the
growth of the company. In keeping with this philosophy, to enhance the employees potential, the Company has continued to
invest in training and developing employees. All new hires are inducted into the organization through a 3 day induction
program, conducted periodically during the year. Training needs for high potential employees are also identified by the
learning and development organization in the Company. Based on specific training needs, programs are conducted. In 2008,
over 1500 man days of training in the area of leadership, sales and technical skills were conducted for employees. The Company
has been continuously focusing on people and processes to encourage and realize their full potential. Cordial and harmonious
relations with employees continued to prevail throughout the year under review.
Place : Bangalore AjayNanavati B.V.Shankaranarayana Rao

17
3M India Limited
REPORT ON CORPORATE GOVERNANCE

In Compliance with Clause 49 of the Listing Agreement with the Stock Exchanges, a report on the Corporate Governance for the year
under review is given below.
1. PHILOSOPHY ON CORPORATE GOVERNANCE
3M India Limited believes that transparent accounting policies, appropriate disclosure norms, best in class board practices and
consistently high standards of corporate conduct towards its stakeholders are essential for sustained corporate growth.
Corporate Governance comprises of a unique combination of factors like regulations, compliance, policies and economic
environments, voluntary practices and disclosures.
2. BOARD OF DIRECTORS
The Board of Directors of the Company was headed by the Non-Executive Chairman, Mr. Thomas P. Spencer till
September 10, 2008 and consequent to his resignation as Chairman, Non-Executive and Independent Director Mr. D.J.Balaji Rao
had been appointed as Chairman. The Board of the Company comprises an appropriate blend of Executive, Non-Executive and
Independent Directors, with professional background and experience in Business, Industry, Finance and Law. During the year
2008, five Board Meetings were held, the dates being February 27, 2008, April 28, 2008, July 25, 2008, September 10, 2008 and
October 29, 2008. The last AGM was held on April 28, 2008. The details of the Board composition, attendance, their other
directorships / committee memberships as of December 31, 2008 are appended below:
No.of Directorships and Committee

Name & Designation No. of Meetings Memberships/Chairmanships Whether
of the Director Category Attended
Other Committee Committee Last AGM
Held Attended Directorships* Memberships* Chairmanships*
Mr. DJ. Balaji Rao

(Chairman - Board of
Directors and Shareholders Non-Executive
Grievance Committee) & Independent 5 5 10 8 2 Yes
Mr. Bert O'Donoghue (a)** Executive

(Managing Director) (Promoter Group) 4 4 Nil Nil Nil Yes
Mr. Ajay Nanavati (a)*** Executive

(Managing Director) (Promoter Group) 1 1 Nil Nil Nil N.A.
Mr.Thomas P. Spencer Non-Executive

Director (Promoter Group) 5 3 Nil Nil Nil Yes
Mr.Richard Lee Becker Non-Executive

Director (Promoter Group) 5 1 Nil Nil Nil Yes
Mr. B.S. Iyer Non-Executive &

(Chairman, Audit Committee) Independent 5 5 Nil Nil Nil Yes
Mr. B. C. Prabhakar Non-Executive

Director & Independent 5 5 2 2 Nil Yes
Mr. B. V. Shankaranarayana Rao Executive

(Whole-time Director) (Promoter Group) 5 5 Nil Nil Nil Yes
* Excludes alternate directorship, directorship in foreign companies and private companies, which are neither a subsidiary nor a holding Company
of a public Company.
# Excludes committees other than Audit Committee, Shareholders / Investors Grievance Committees,
(a) Nominee of 3M Company, USA.
** Resigned as a Director and Managing Director on September 30, 2008.
*** Appointed as a Director and Managing Director on October 1, 2008.
18
Annual Report 2008
Code of Conduct
The Company's Board has laid down a code of conduct for all Board Members and Senior Management of the Company. The code
of conduct is available on the website of the Company, www.3m.com\in. Requisite annual affirmations of compliance with respective
codes have been made by the Directors and Senior Management of the Company.
3. AUDIT COMMITTEE
The Audit Committee of the Company functions in accordance with the requirements of Section 292A of the Companies
Act, 1956 and the Listing Agreement
Constitution of Audit Committee : The current Audit Committee consists of four Non-executive Directors, three of which are
independent directors and all of them have financial and accounting knowledge. Mr. B.S. Iyer having financial expertise and
experience acted as Chairman of the Audit Committee. The Company Secretary acted as the Secretary to the Committee.
At the invitation of the Committee, the Internal Auditor, the Managing Director, the Head of Finance, Head of Legal
Department and Statutory Auditors attend the Audit Committee meetings, to answer and clarify the queries that are raised at
the Committee meetings.
Composition of Audit Committee and Number of Meetings Attended : During the year under review, four meetings of the Audit
Committee were held, February 27, 2008, April 28, 2008, July 25, 2008 and October 29, 2008. The composition of the Audit
Committee and the number of meetings attended during the year under review as under:
Nameofthe No. of Meetings held No.ofMeetings

Committee Member during the tenure attended
Mr. B.S. Iyer 4 4

Mr. DJ. Balaji Rao 4 4
Mr. B.C. Prabhakar 4 4
Mr. Richard Lee Becker 4 1
The Terms of Reference of Audit Committee The role and terms of reference of the Audit Committee include the following :
Overview of the Company's financial reporting process and the disclosure of its financial information to ensure that the
financial statements are correct, sufficient and credible.
Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the Statutory
Auditors and the fixation of audit fees.
Approval of payment to Statutory Auditors for any other services rendered by them.
Reviewing, with the management, the annual financial statements before submission to the Board for approval, with
particular reference to:
Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms
of clause (2AA) of Section 217 of the Companies Act, 1956.
Changes, if any, in accounting policies and practices and reasons for the same.
Major accounting entries involving estimates based on the exercise of judgment by Management.
Significant adjustments made in the financial statements arising out of audit findings.
Compliance with listing and other legal requirements relating to financial statements.
Disclosure of any related party transactions.
Qualifications in the draft audit report.
Reviewing, with the Management, the quarterly financial statements before submission to the Board for approval.
Reviewing, with the Management, performance of Statutory and Internal Auditors, adequacy of the internal control systems.
• Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing
and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit.
Discussion with Internal Auditors any significant findings and follow-up there on.
Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is suspected fraud
or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.
19
3M India Limited
Discussion with Statutory Auditors before the audit commences, about the nature and scope of audit as well as post-audit
discussion to ascertain any area of concern.
To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case
of non-payment of declared dividends) and creditors.
Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
Powers of the Audit Committee: The Audit Committee has the following powers:
to investigate any activity within its terms of reference

to seek information from any employee
to obtain outside legal or other professional advice

to secure the attendance of outsiders with relevant expertise, if it considers necessary
Review of information by Audit Committee: The Audit Committee reviews the following information
Management discussion and analysis of financial condition and results of operations.

Statement of significant related party transactions (as defined by the Audit Committee) submitted by Management.
Management letters / letters of internal control weaknesses issued by the Statutory Auditors.
Internal audit reports relating to internal control weaknesses.
The appointment, removal and terms of remuneration of the Chief Internal Auditor.
REMUNERATION TO DIRECTORS:
The Company has not constituted a separate Remuneration Committee. None of the Non-Executive Directors have any pecuni-
ary relationship with the Company. The Company has currently two Executive Directors, Mr. Ajay Nanavati, Managing Director
and Mr. B. V. Shankaranarayana Rao, Whole-time Director. The terms of appointment of the Executive Directors were fixed by the
Board and approved by the Shareholders.
Details of remuneration paid to Executive Directors during the year 2008:

In Rupees
Name and Designation Period Salaries & Contribution to Estimated Total
Allowances Provident Fund Value of
& Other Funds Benefits
Mr.BerO'Donoghue January 1,2008 -
(Managing Director) September 30, 2008 5,690,566 _ 2,340,000 8,030,566
Mr. Ajay Nanavati October 1,2008 -
(Managing Director) December 31, 2008 1,720,013 132,222 518,780 2,371,015
Mr.B.V.Shankaranarayana Rao January 1,2008 -
(Whole-time Director) December 31,2008 5,552,591 609,815 - 6,162,406
Presently, 3M India Limited does not have a scheme for grant of stock options either to the Executive Directors or to other employees.
The Non-Executive Directors do not draw from the Company any remuneration other than sitting fees. Sitting fees paid to the
Non-Executive Directors during the year 2008 are given below :
In Rupees
Name of the Director Board Meeting Committee Meetings Total
Mr.B.S. Iyer 100,000 160,000 260,000
Mr.DJ. Balaji Rao 100,000 160,000 260,000
Mr. B.C. Prabhakar 100,000 160,000 260,000
Mr.Thomas P. Spencer and Mr. Richard Lee Becker waived payment of sitting fees.
20
Annual Report 2008
5. SHAREHOLDERS' / INVESTORS' GRIEVANCE COMMITTEE:
During the year under review, four Shareholder's/Investors' Grievance Committee meetings were held, the dates being,
February 27, 2008, April 28, 2008, July 25, 2008 and October 29, 2008. The attendance of the members at the Shareholders' Grievance
Committee Meeting held during the year was as follows:
Name of the No. of Meetings held No. of Meetings

Committee Member during the tenure attended
Mr.DJ. Balaji Rao 4 4

Mr.Bert O'Donoghue* 3 3
Mr.Ajay Nanavati** 1 1
Mr.B.S. Iyer 4 4
Mr.B.C.Prabhakar 4 4
* Resigned as Member on September 30, 2008

** Appointed as Member from October 1,2008
Mr. D. J. Balaji Rao, Non-Executive and Independent Director is the Chairman of the Committee and Mr. K. Ramesh Chandra,
Company Secretary is the Compliance Officer of the Company.
The Shareholders' Grievance Committee is authorised to :
1. Monitor the system of share transfer transmission, sub-division, consolidation of share certificates and issue of duplicate certificates.
2. Deal with all investor related issues including redressal of complaints from shareholders relating to transfer of shares,
non-receipt of annual report, etc.
3. To delegate such powers to Company's officers, as may be necessary including powers to approve transfers, transmissions,
authenticate share certificates and to take other actions in relation to Shareholders' related matters.
The Company through its Registrar and Share Transfer Agents has resolved most of the investor grievances / correspondence
within a period of 7 days from the date of their receipt except in cases that are constrained by disputes or legal impediments.
The statistics of Shareholders complaints received / redressed, during the year 2008, furnished below :
No. of complaints relating to non-receipt of dividend warrants, Redemption /

Interest warrants, Annual Reports, Share certificates, endorsement stickers & others
received during the year 35
No. of Shareholders complaints resolved during the year 35
No. of Shareholders complaints pending as on December 31, 2008 Nil
6. General Body Meeting:

Details of Annual General Meetings of the Company for the last three years:
Date Meeting Location Time
April 24, 2006 AGM Hotel Leela Palace 23, Kodihalli, Airport Road, Bangalore - 560 008 10.00a.m.
April 27, 2007 AGM Hotel The Capitol, Raj Bhavan Road, Bangalore - 560 001 10.00a.m.
April 28, 2008 AGM The Chancery Pavilion, 135, Resident Road, Bangalore - 560 025 10.00a.m.
Details of Special Resolutions passed in the previous three AGMs : Nil

Postal Ballot
During the year 2008, there was no business, which had to be conducted through a postal ballot. At present, the Company does not have
any resolution to be decided by the Members by Postal Ballot.
7. DISCLOSURES
Related party transactions
The Company follows the following policy in disclosing the related party transactions to the Audit Committee :
A statement in summary form of transactions with related parties at arm's length price in the normal course of business.
All material individual transactions with related parties, which are not in the normal course of business and which are not on
an arm's length basis.
21
3M India Limited
Disclosure of Accounting Treatment

The guidelines/accounting standards notified by Section 211(3C) of the Companies Act, 1956 and relevant provision of the
Companies Act, 1956 have been followed in preparation of the financial statements of the Company.
Risk Management
The Company has identified various risks and procedures to mitigate the same. The Audit Committee and the Board have reviewed
the same. When new risks are identified, the same would be then assessed, controls designed, put in place and enforced within a
fixed timeframe, as set.
Subsidiary Companies
The Company does not have any subsidiaries.
Capital Issues
The Company has not made any capital issues during the year 2008.
Details of non-compliance by the Company, penalties, and strictures imposed on the Company by Stock Exchange or SEBI or any
statutory authority,on any matter related to capital markets, during the last three years:
There have been no instances of non-compliance by the Company on any matter related to listing agreement with the stock exchanges.
Compliance with Mandatory Requirements

The Company has complied with all the mandatory requirements of this clause. As regards the non-mandatory requirements the
extent of compliance has been stated in this report against each item.
8. MEANS OF COMMUNICATION:
Quarterly financial results, including the half year results are published in Business Standard and Financial Express;
Samyukta Karnataka and The Times of India (Bangalore Edition). The annual audited accounts are likewise published. The half-
yearly report is not separately sent to each household of the Shareholders. In accordance with the listing regulations, the
Company's audited and unaudited quarterly / half yearly / annual results are also posted in the SEBI's website under EDIFAR
(Electronic Data Information Filing And Retrieval System). The Company's financial results are also displayed in the Company's
website: www.3m.com\in
9. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis report on the Company's activities during the year is published as part of the
Company's Annual Report. This report has been placed to the Company's Audit Committee.
10. SHAREHOLDERS
Details of the Directors seeking appointment/re-appointment at the ensuing AGM are provided in the Notice convening the AGM.
11. GENERAL SHAREHOLDER INFORMATION:
April 29, 2009

The Chancery Pavilion
Annual General Meeting 2009
135, Residency Road, Bangalore - 560 025
Time 10.30 a.m.
Financial Calendar :
a) Date of Book Closure April 23, 2009 - April 29, 2009 (both days inclusive)
b) Dividend payment date N.A.
c) Financial results Third / Fourth week of April, 2009 - unaudited results for the quarter ended March 2009.
Third / Fourth week of July, 2009 - unaudited results for the quarter and half
year ended June 2009.
Third /Fourth week of October, 2009 - unaudited results for the quarter and nine
months ended September 2009.
Third / Fourth week of February, 2010 - Audited Results for the quarter and year ended
December31,2009.
d) Listing on Stock Exchanges The National Stock Exchange Limited, Mumbai (Code-3M INDIA)
Bombay Stock Exchange Limited, Mumbai (Code - 523395)
The Calcutta Stock Exchange Association, Calcutta (Code - 12027) *
' applied for voluntary delisting. Final Certificate ofdelisting is yet to be received.
22
Annual Report 2008
The Company has paid annual listing fees, as prescribed, to The National Stock Exchange Limited and Bombay Stock Exchange Limited,
Mumbai for the financial year, 2008-2009.
Registrar & Share Transfer Agents :
Share registration and other investor related activities are carried out by our Registrar and Transfer Agents, M/s. Karvy Computershare
Private Limited for both Physical and Demat securities. Their address is appended below :
Karvy Computershare Private Limited

Plot no.17-24, Vithal Rao Nagar, Madhapur;
Hyderabad - 500 034
Tel: 040-23420816 / 824 Fax: 040-23420814
E-mail : mailmanager@karvy.com Contact person : Mr. K. Subba Reddy
Share Transfer System:
Shares sent for transfer in physical form are registered and despatched within 15 days of receipt of the documents, if documents are
found to be in order. Shares under objection are returned within 15 days.
Monitoring of Share Transfers and other investor related matters are dealt with by the Shareholders' Grievance Committee. The
Company's Registrars, M/s. Karvy Computershare Private Limited process the share transfers in respect of physical securities on
a fortnightly basis and the processed transfers are approved by the authorized Executives of the Company also on a
fortnightly basis.
All requests for dematerialization of shares, which are in order are processed within 15 days and the confirmation is
given to the respective depositories, i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India)
Limited (CDSL).
Stock Price Data:
Bombay Stock Exchange (BSE) National Stock Exchange (NSE)

(in Rs.) (in Rs.)
High Low High Low
January 2008 1,979,00 1,821.00 1,849.00 1,875.00

February 2008 1,974.00 1,858.55 1,795.00 1,964.00
March 2008 1,875,00 1,782.00 1,794.00 1,815.00
April 2008 1,899,20 1,756.05 1,853.00 1,853.10
May 2008 1,874.85 1,850.00 1,825.15 1,825.15
June 2008 1,717,00 1,650.00 1,631.00 1,670.00
July 2008 1,649.00 1,578.05 1,571.00 1,632.00
August 2008 1,625.00 1,583.00 1,564.00 1,618.00
September 2008 1,439.90 1,160.00 1,370.00 1,411.00
October 2008 983,00 920.00 925.00 946.00
November 2008 916.05 916.05 926.95 926.95
December 2008 990.00 920.00 920.00 932.90
23
3M India Limited
Stock Performance :
BSE Sensex Vs. 3M Share Price
(Monthly Closing Price)
20,000
Sensex 3M
Crisil Index: Not applicable
Distribution of Shareholding as on December 31,2008
Range of Shares No. of Shareholders % to total Shareholders No. of Shares held % to total Shares
1 to 5000 8,661 99.44 913,174 8.11
5001 to 10000 22 0.25 162,868 1.45
10001 to 20000 11 0.13 172,598 1.53
20001 to 30000 3 0.03 74,875 0.66
30001 to 40000 3 0.03 97,996 0.87
40001 to 50000 2 0.02 94,920 0.84
50001 to 100000 2 0.02 182,809 1.62
100001 and above 6 0.07 9,565,830 84.92
TOTAL 8,710 100.00 11,265,070 100.00
24
Annual Report 2008
Shareholding pattern as on December 31, 2008

Number of Total Percentage of
Category of Shareholder Shareholders Number of Shareholding
Shares
A Shareholding of Promoter and promoter group
1 Indian
a Individuals/Hindu Undivided Family - -
b Central Government/State Governments - -
c Bodies Corporate - -
d Financial Institutions/Banks - -
e Any Other
Sub-Total (A)(1) - -
2 Foreign
a Individuals (Non-Resident Individuals/Foreign/lndividuals) - -
b Bodies Corporate 1 8,562,000 76.00
c Institutions - -
d Any Other - -
Sub-Total (A)(2) 1 8,562,000 76.00
Total Shareholding of Promoter and Promoter Group*
A = (A)(1)+(A)(2) 1 8,562,000 76.00
B Public Shareholding
1 Institutions
a Mutual Funds/UTI 17 759,023 6.74
b Financial Institutions/Banks 1 20 0.00
c Central Government/State Governments - - -
d Venture Capital Funds - - -
e Insurance Companies 1 60 0.00
f Foreign Institutional Investors 12 531,553 4.72
g Foreign Venture Capital Investors - - -
h Any Other - - -
Sub-Total (B)(1) 31 1,290,656 11.46
2 Non-Institutions
a Bodies Corporate 229 369,683 3.28
b Individuals
1. Individual shareholders holding nominal share capital up to Rs.1 lakh 8,351 917,940 8.15
ii. Individual shareholders holding nominal share capital in excess of Rs.1 lakh 4 107,580 0.95
c Any Other
Trust 1 100 0.00
Non Resident Indians 83 16,551 0.15
Clearing Members 10 560 0.00
Sub-Total (B)(2) 8,678 1,412,414 12.54
Total Public Shareholding
B = (B)(1)+(B)(2) 8,709 2,703,070 24.00
Total (A)+(B) 8,710 11,265,070 100.00
C Shares held by Custodians and against which Depository Receipts have been issued - -
Grand Total (A)+(B)+(C) 8,710 11,265,070 100.00
None of the Promoters have pledged their shares as on December 31, 2008
25
3M India Limited
DEMATERIALISATION OF SHARES AND LIQUIDITY

22.68 % of the total equity capital was held in dematerialised form as on December 31, 2008.
Outstanding GDRs/Warrants, Convertible Bonds, conversion date and likely impact on equity: Not applicable
Plant Locations: Address for correspondence

C9 S ere
Plot No. 48-51, Electronics City, Hosur Road, Bangalore - 560 100 '
Plot No. 48-51, Electronics City, Hosur Road,
Plot No.8, Moraiya Industrial Area;Tal Sanand, Bangalore - 560 100
Sarkhej Bavla Highway, Ahmedabad - 382 213
Corporate Office:
Plot No.B-20, MIDC; Ranjangaon Industrial Area
Tal:Shirur, Dist: Pune; Pin :412 210 Concorde Block, UB City, 24, Vittal Mallya Road,
Bangalore - 560 001
NON-MANDATORY REQUIREMENTS
The Company has a Non-Executive Chairman and his official expenses are reimbursed. However, no separate Chairman office is
maintained at the Company's expense.
As on date, there is no Independent Director having term of office exceeding nine years on the Board of the Company.
Remuneration Committee
Presently, the Company does not have a Remuneration Committee.

Shareholders' Rights
The Company's half yearly results are published in English Newspaper having a circulation all over India and in Kannada newspaper
(having circulation in Bangalore) the same are not sent to the shareholders of the Company. Significant events of the Company are
being disclosed to the Stock Exchanges from time to time.
Audit qualifications
There were no qualifications by the Auditors in their report for the financial year ended December 31, 2008.
Training of Board Members
Presently, the Company does not have any training programme for the Board members.
Mechanism for evaluating non-executive Board Members

Presently, the Company does not have such a mechanism as contemplated for evaluating the performance of non-executive Board
members.
Whistle-Blower policy
Presently, the Company does not have a Whistle-Blower policy. No personnel of the Company has been denied access to any of the
Directors of the Company.
Place : Bangalore AjayNanavati B.V.ShankaranarayanaRao

26
Annual Report 2008
Certificate by Chief Executive Officer (CEO) and Chief Financial Officer (CFO)
We hereby certify that:
(a) We have reviewed financial statements and the cash flow statement for the year ended December 31, 2008 and that to the best of
our knowledge and belief:
(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might
be misleading;
(ii) these statements together present a true and fair view of the Company's affairs and are in compliance with existing accounting
standards, applicable laws and regulations.
(b) To the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal
or violative of the Company's code of conduct.
(c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the
effectiveness of internal control systems of the Company pertaining to financial reporting and we have disclosed to the Auditors
and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the
steps we have taken or propose to take to rectify these deficiencies.
(d) We further confirm that:
(i) there were no significant changes in internal control over financial reporting during the year;
(ii) there were no significant changes in accounting policies during the year and
(iii) there were no instances of significant fraud of which we are aware and the involvement therein, of the management or an employee
having a significant role in the company's internal control system over financial reporting.
Place : Bangalore AjayNanavati B.V.ShankaranarayanaRao

27
3M India Limited
AUDITORS' CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE

UNDER CLAUSE 49 OF THE LISTING AGREEMENT(S)
To the members of 3M India Limited
We have examined the compliance of conditions of corporate governance by 3M India Limited for the year ended December 31, 2008,
as stipulated in clause 49 of the Listing agreement(s) of the said company with the stock exchange(s) in India.
The compliance of conditions of corporate governance is the responsibility of the company's management. Our examination was
carried out in accordance with the Guidance Note on Certification of Corporate Governance (as stipulated in Clause 49 of the Listing
Agreement), issued by the Institute of Chartered Accountants of India and was limited to procedures and implementation thereof,
adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an
expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the company has
complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement(s).
We state that such compliance is neither an assurance as to the future viability of the company nor the efficiency or effectiveness
with which the management has conducted the affairs of the company.
Usha A Narayanan
Partner
Membership Number 23997
For and on behalf of

Place : Bangalore Lovelock & Lewes
Date : February 27, 2009 Chartered Accountants
28
Annual Report 2008
AUDITORS' REPORT TO THE MEMBERS OF 3M INDIA LIMITED
1. We have audited the attached Balance Sheet of 3M India Limited as at December 31, 2008, and the related Profit and Loss
Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to
this report. These financial statements are the responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment)
Order, 2004 (together'the Order'), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The
Companies Act, 1956 of India (the 'Act') and on the basis of such checks of the books and records of the company as we
considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement
on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:
(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for
the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our
examination of those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the
books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with
the accounting standards referred to in sub-section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from the directors, as on December 31, 2008 and taken on record by the
Board of Directors, none of the directors is disqualified as on December 31, 2008 from being appointed as a director in
terms of clause (g) of sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial
statements together with the notes thereon and attached thereto, give, in the prescribed manner, the information required
by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the company as at December 31, 2008;
(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Usha A Narayanan
Partner

Place: Bangalore Lovelock & Lewes
29
3M India Limited
ANNEXURE TO AUDITORS' REPORT
Referred to in paragraph 3 of the Auditors' Report of even date to the members of 3M India Limited on the financial statements for the
year ended December 31, 2008
1. (a) The company is maintaining proper records showing full particulars including quantitative details and situation of fixed
assets.
(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the
items over a period of three years, which in our opinion, is reasonable having regard to the size of the company and the
nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management
during the year and no material discrepancies between the book records and the physical inventory have been noticed.
(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not
been disposed off by the company during the year.
2 (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In
respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency
of verification is reasonable.
(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and
adequate in relation to the size of the company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of
inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
3. (a) The company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register
maintained under Section 301 of the Act and accordingly, paragraphs iii(b), iii(c) and iii(d) of the Order, are not applicable.
(b) The company has not taken any loans secured or unsecured, from companies, firms or other parties covered in the register
maintained under Section 301 of the Act and accordingly, paragraphs iii(f) and iii(g) of the Order, are not applicable.
4. In our opinion and according to the information and explanations given to us, having regard to the explanation that certain
items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations,
there is an adequate internal control system commensurate with the size of the company and the nature of its business for the
purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books
and records of the company, and according to the information and explanations given to us, we have neither come across nor
have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.
5. In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of
contracts or arrangements entered into the register in pursuance of Section 301 of the Act and exceeding the value of Rupees
Five Lakhs in respect of any party during the year, which have been made at prices which are not reasonable having regard to
the prevailing market prices at the relevant time.
6. The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the
rules framed there under.
7. In our opinion, the company has an internal audit system commensurate with its size and nature of its business.
8. The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Act for any of the products of the company.
9. (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion,
the company is generally regular in depositing the undisputed statutory dues including provident fund, investor education
and protection fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess
and other material statutory dues as applicable with the appropriate authorities
30
Annual Report 2008
(b) According to the information and explanations given to us and the records of the company examined by us, the particulars
of dues of income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess as at December 31, 2008 which
have not been deposited on account of a dispute, are as follows
Name of Nature of Amount Period to which Forum where the

the statute Dues Claimed the amount relates dispute is pending
Income Income Tax 23,124,330 Assessment year Additional Commissioner

Tax Act, 1961 2005-06 of Income Tax
10. The company has no accumulated losses as at December 31, 2008 and it has not incurred any cash losses in the financial year
ended on that date or in the immediately preceding financial year.
11. In our opinion, and according to the information and explanations given to us, the company has not given any guarantee for
loans taken by others from banks or financial institutions during the year.
12. During the course of our examination of the books and records of the company, carried out in accordance with the generally
accepted auditing practices in India, and according to the information and explanations given to us, we have neither come
across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case
by the management.
13. The other clauses, xi, xii, xiii, xiv, xvi, xvii, xviii, xix and xx of paragraph 4 of the Order are not applicable in the case of the company
for the current year, since in our opinion there is no matter which arises to be reported in the aforesaid order.
Usha A Narayanan
Partner

Place : Bangalore Lovelock & Lewes
31
3M India Limited
BALANCE SHEET AS AT DECEMBER 31, 2008
Schedule 2008 2007

Number Rs. Rs.
SOURCES OF FUNDS
Shareholder's Funds
Capital 1 112,650,700 1 1 2,650,700
Reserves and Surplus 2 3,364,903,708 2,790,354,621
3,477,554,408 2,903,005,321
APPLICATION OF FUNDS
Fixed Assets
Gross Block 3 1,668,548,542 1,008,773,159
Less: Depreciation 508,598,909 442,095,349
Net Block 1,159,949,633 566,677,810
Capital Work in Progress 273,269,625 407,554,966
1,433,219,258 974,232,776
Net Deferred Tax Asset [Schedule 1 4, Note 1 8(b)] 51,248,757 43,255,607
Current Assets, loans and advances

Inventories 4 1,059,699,112 675,670,396
Sundry Debtors 5 1,085,957,006 837,204,487
Cash and Bank Balances 6 524,835,661 959,909,199
Other Current Assets 7 149,697 3,999,208
Loans and Advances 8 613,997,909 490,457,033
3,284,639,385 2,967,240,323
Less: Current Liabilities and Provisions
Liabilities 9 1,169,499,371 1,002,749,467
Provisions 10 122,053,621 78,973,918
1,291,552,992 1,081,723,385
Net Current Assets 1,993,086,393 1,885,516,938
3,477,554,408 2,903,005,321
The schedules referred to above and Notes thereon form an integral part of the Accounts
This is the Balance Sheet referred to in our For and on behalf of the Board
report of even date
Usha A Narayanan Ajay Nanavati B.V.Shankaranarayana Rao K. Ramesh Chandra

Partner Managing Director Whole-time Director Company Secretary
Membership No: 23997
Lovelock & Lewes
Chartered Accountants
Place: Bangalore
Date: February 27,2009
32
Annual Report 2008
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31,2008
Schedule 2008 2007

Number Rs. Rs.
INCOME
Sales 7,800,789,363 6,466,963,575

Less: Excise Duty 374,197,645 361,385,189
7,426,591,718 6,105,578,386
Other income 11 97,455,820 84,968,901
7,524,047,538 6,190,547,287
EXPENDITURE
Materials 12 4,267,603,309 3,253,481,087
Manufacturing and Other Expenses 13 2,273,923,928 1,811,858,907
Depreciation 72,292,207 58,922,643

6,613,819,444 5,124,262,637
Profit for the year before taxation 910,228,094 1,066,284,650
Provision for Income Tax (Schedule 14, Note 18)

- Current Tax 317,099,409 375,313,650
- Deferred Tax (7,993,150) (6,747,403)

- Fringe Benefit Tax 26,572,748 20,890,568
Profit for the year after taxation 574,549,087 676,827,835
Profit brought forward from previous year 2,692,139,621 2,015,311,786
Profit carried to Balance Sheet 3,266,688,708 2,692,139,621
Earnings Per Share - Basic and diluted

(Schedule 14, Note 20) 51.00 60.08
The schedules referred to above and notes thereon form an integral part of the Accounts
This is the Profit and Loss Account referred to in our For and on behalf of the Board
report of even date
Usha A Narayanan Ajay Nanavati B.V.Shankaranarayana Rao K. Ramesh Chandra

Lovelock & Lewes
Place: Bangalore
33
3M India Limited
SCHEDULES TO ACCOUNTS
2008 2007
Rs. Rs.
SCHEDULE 1
SHARE CAPITAL
AUTHORISED
11,265,070 (2007 :11,265,070) Equity Shares of Rs. 10 each 112,650,700 112,650,700
ISSUED, SUBSCRIBED AND PAID UP
11,265,070 (2007 :11,265,070) Equity Shares of Rs. 10 each 112,650,700 112,650,700
Note: Of the above 8,562,000 equity shares (2007: 8,562,000 equity
shares) are held by 3M Company, USA, Holding Company
112,650,700 112,650,700
SCHEDULE2
RESERVES AND SURPLUS
General Reserves 3,225,000 3,225,000
Profit and Loss Account 3,266,688,708 2,692,139,621
Securities Premium account 94,990,000 94,990,000
3,364,903,708 2,790,354,621
34
SCHEDULE TO ACCOUNTS
SCHEDULES
FIXED ASSETS [Schedule 14, Note 1 (b) and (c)]

ID
CD
-a
o
GROSS BLOCK AT COST DEPRECIATION/AMORTISATION NET BLOCK
ro
o
Particulars Sale/ Sales / o
Additions Additions Deletions 2008 oo
2007 Deletions 2008 2007 2008 2007
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Freehold Land 25,153,562 - 2,358,420 22,795,142 - - - 22,795,142 25,153,562
Leasehold Land 45,809,456 - - 45,809,456 - - - 45,809,456 45,809,456

(Refer Note below)
Goodwill 60,017,170 - - 60,017,170 60,017,170 - - 60,017,170 -
Factory Buildings 98,731,151 318,026,570 9,544,109 407,213,612 24,600,136 4,959,751 2,620,749 26,939,138 380,274,474 74,131,015
Leasehold Improvements 177,289,780 1,474,810 - 178,764,590 14,266,861 18,328,910 - 32,595,771 146,168,819 163,022,919
Plant and Machinery 434,479,816 274,459,570 3,080,088 705,859,298 199,034,197 39,552,910 2,449,786 236,137,321 469,721,977 235,445,619
Data Processing Equipments

and Software 96,130,247 804,740 24,702 96,910,285 95,097,580 1,152,818 24,702 96,225,696 684,589 1,032,667
Furniture, Fixtures and

Office Equipments 68,447,723 80,833,029 1,068,047 148,212,705 47,190,825 8,048,833 693,410 54,546,248 93,666,457 21,256,898
Vehicles 2,714,254 252,030 - 2,966,284 1,888,580 248,985 2,137,565 828,719 825,674
1,008,773,159 675,850,749 16,075,366 1,668,548,542 442,095,349 72,292,207 5,788,647 508,598,909 1,159,949,633 566,677,810
2007 793,730,647 312,957,996 97,915,484 1,008,773,159 475,370,162 58,922,643 92,197,456 442,095,349
Capital Work in Progress [including capital advance Rs. 22,191,849 (2007: Rs. 38,530,259)] 273,269,625 407,554,966
1,433,219,258 974,232,776
Note: Leasehold land represents amount paid to Maharashtra Industrial Development Corporation for land to be purchased on 95 years lease, for which compliance with certain conditions
as mentioned in the License Agreement and registration is pending as on date.
3M India Limited
2008 2007
Rs. Rs.
SCHEDULE4
INVENTORIES
[Schedule 14, Note 1(d)]
Raw Materials 412,820,169 245,648,651

[including in-transit Rs. 49,400,949 (2007: Rs.51,805,449)]
Packing Materials 15,594,856 10,490,759
Semi Finished Goods 30,225,132 19,487,755
Finished Goods 199,649,644 130,435,608
Traded Goods 398,223,143 265,418,737
[including in-transit Rs. 65,567,745 (2007 : Rs.54,159,459)]
Stores and Spares 3,186,168 4,188,886
1,059,699,112 675,670,396
SCHEDULES
SUNDRY DEBTORS
(Secured)
Over six months 3,953,843 4,437,118
Others 35,277,175 28,717,870
(Unsecured)
Over six months
- considered good 16,793,292 524,701
- considered doubtful 43,594,853 63,110,233
Others
- considered good 1,029,932,696 803,524,798
1,129,551,859 900,314,720
Less: Provision for doubtful debts 43,594,853 63,110,233
1,085,957,006 837,204,487
SCHEDULE6
CASH AND BANK BALANCES
Cash on hand 161,856 115,900
With Scheduled Banks:
- Current Accounts 320,360,712 172,171,114
- Deposit Accounts* 203,204,000 786,700,000
- Margin Money Accounts** 1,109,093 922,185
524,835,661 959,909,199
* Includes deposit of Rs.3,100,000 (2007 : Rs. 10,200,000) under lien

** Held against guarantees issued
36
Annual Report 2008
2008 2007
Rs. Rs.
SCHEDULE?
OTHER CURRENT ASSETS
Interest Accrued but not due 149,697 3,999';208
149,697 3,999,208
SCHEDULES
LOANS AND ADVANCES
(Unsecured, considered good unless otherwise stated)

Advances recoverable in cash or in kind or for value to be received* 258,375,783 263,072",344
Taxation (Net) 70,623,593 46,818,747
Deposits with Government departments and others* 173,191,833 151,377,023

Balances with Excise and Customs Authorities 125,946,889 37,205,608
628,138,098 498,473,722
Less: Provision for doubtful advances 14,140,189 8,016,689
613,997,909 490,457,033
* Includes doubtful advances and deposits of Rs. 14,140,189 (2007 : Rs. 8,016,689)
SCHEDULES
LIABILITIES
Sundry creditors for goods, expenses and services
- Dues to Micro, Small and Medium Enterprises (Schedule 14, Note 12) 1,498,148 928,748
- Others 1,007,702,685 852,978,586

Advance from customers/distributors 87,535,259 77,174,475
Other Liabilities 72,763,279 71,667,658
1,169,499,371 1,002,749,467
SCHEDULE 10-
PROVISIONS
Employee Benefits
- Gratuity (Schedule 14, Note 14) 24,377,824 8,609,215
- Leave Encashment / Compensated Absences 70,064,283 46,194,959
Fringe Benefit Tax (Net) 4,471,320 997,550
Sales Tax (Schedule 14, Note 19) 22,247,194 17,472,194
Other Payables (Schedule 14, Note 19) 893,000 5,700,000
122,053,621 78,973,918
37
3M India Limited
2008 2007
Rs. Rs.
SCHEDULE 11
OTHER INCOME
Interest - Gross [tax deducted at source Rs.1 1,290,780

(2007: Rs.1 2,1 91, 670)] 50,629,407 53,802,733
Exchange Gain (net) 11,140,583
Provision for doubtful debts written back (net) 19,515,380 10,277,769
Income from Sub-lease [tax deducted at source Rs. 2,334,603

(2007: Rs.387,486)] 10,302,750 1,710,000
Balances / Provisions no longer required 4,807,000 8,037,816
Profit on Sale of Fixed Assets (net) 12,201,283
97,455,820 84,968,901
SCHEDULE 12
MATERIALS
Raw materials Consumed 1,585,991,347 1,382,668,278
Traded Goods - Purchased 2,894,367,781 1,900,115,859
Movement in Inventory :
Opening Stock
- Semi Finished Goods 19,487,755 16,808,024
- Finished Goods 130,435,608 118,053,803
- Traded Goods 265,418,737 251,177,223
415,342,100 386,039,050
Less : Closing Stock
- Semi Finished Goods 30,225,132 19,487,755
- Finished Goods 199,649,644 130,435,608
- Traded Goods 398,223,143 265,418,737
628,097,919 415,342,100
(212,755,819) (29,303,050)
(Increase)/ Decrease in inventory (212,755,819) (29,303,050)
4,267,603,309 3,253,481,087
38
Annual Report 2008
2008 2007
Rs. Rs.
SCHEDULE 13
MANUFACTURING AND OTHER EXPENSES
Employee Cost:
Salaries , wages and bonus [including provision for
Leave encashment Rs. 23,869,324 (2007: Rs. 8,823,700)] * 782,200,793 635,208,272
Contribution to Provident and other funds
[including provision for gratuity Rs. 29,604,695 (2007: Rs. 9,631,495)] 96,224,227 63,147,995
Staff welfare expenses * 67,524,586 57,385,790
945,949,606 755,742,057
Power, fuel and water * 57,063,751 48,868,936
Stores and spares consumed 30,141,072 26,444,284
Packing materials consumed 111,267,094 97,007,114
Excise Duty 6,389,585 21,486,371
Repairs and maintenance
- Building * 20,252 ,731 1 5,247,329
- Plant and machinery 27,575 ,213 23,371,860
- Others * 11,814,148 59,642,092 11,002,852 49,622,041
Lease rentals (Schedule 14, Note 17) * 176,798,898 144,738,548
Rates and taxes 13,730,355 1 7,952,695
Communication * 28,126,376 21,044,482
Travel and conveyance 124,837,592 111,530,308
Insurance 23,831,634 16,785,185
Legal and professional charges (Schedule 14, Note 5) 18,320,237 20,176,272
Selling, Distribution and Advertisement Expenses 337,374,809 242,497,295
Commission on sales 61,151,545 30,324,285
Freight outward (net) 11,950,606 15,810,393
Corporate Management Fees (Net) * 92,508,203 84,386,210
Interest to others 4,666,971 3,387,000
Directors' sitting fees 780,000 780,000
Bad debts written off 10,414,693 8,649,274
Provision for doubtful advances and deposits 6,123,500 -
Loss on Sale of Fixed Assets (net) - 3,022,149

Exchange loss (net) 40,820,713 -
Miscellaneous expenses * 112,034,596 91,604,008

2,273,923,928 1,811,858,907
* Net of recoveries amounting to Rs. 20,087,168 (2007 : Rs. 18,632,524)

recovered from 3M Electro & Communication India Private Limited,
a subsidiary of 3M Company, St. Paul, USA.
39
3M India Limited
NOTES TO ACCOUNTS
SCHEDULE 14
1 Statement on Significant Accounting Policies
a Method of Accounting
The Company adopts the historical cost concept and accrual basis in accordance with generally accepted accounting
principles (GAAP) in India for the preparation of its accounts. The Financial Statements are prepared to comply in all material
aspects with all the applicable accounting principles in India, the applicable accounting standards notified u/s 211 (3C) of the
Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.
b Fixed assets
Fixed assets are stated at original cost less accumulated depreciation. Cost includes invoice price and wherever applicable
freight, duties and taxes, related interest on specific borrowings upto the date of acquisition/installation and expenses
incidental to acquisition and installation. Operating Software is capitalized along with fixed assets.
c Depreciation and amortisation
Depreciation on fixed assets other than leasehold improvements is provided on straight line method at the following rates
specified which are equal to or higher than the principal rates specified in Schedule XIV to the Companies Act, 1956:
Per Annum
Buildings 3.34%
Plant and Machinery 10.00%
Data Processing Equipments and Software 20.00% to 33.33%
Office Equipments 20.00%
Furniture and Fixtures 6.67%
Vehicles 20.00%
Leasehold improvements are amortised over the period of lease as estimated by the management.
Application software are amortised over their useful life as determined by the management.
Inventories
Inventories are valued at lower of cost and net realisable value except in case of stores and spares which are valued at cost.
The costs are, in general, ascertained as under:
Raw Materials:
First in first out method based on actual cost.
Traded goods:
First in first out method based on actual cost. Goods lying at bonded warehouse are valued inclusive of customs duty.
Stock in transit is valued excluding customs duty.
Finished goods and Work in Progress:
Material cost on weighted average method plus labour and appropriate overheads and, where applicable, excise duty.
Provision for obsolescence is made wherever considered necessary based on the age of the stocks.
Foreign Currency Transactions
Transactions in foreign currency are recognised at the rates of exchange ruling on the dates of the transactions.
Liabilities/ assets in foreign currencies are reckoned in the accounts as per the following principles:
Foreign currency liabilities contracted for acquiring fixed assets are restated at the rates ruling at the year end and all
exchange differences arising as a result of such restatement are adjusted to the profit and loss account.
All monetary assets and liabilities denominated in foreign currency are restated at the rates ruling at the year end and all
exchange gains/ losses arising there from are adjusted to the Profit and Loss Account, except those covered by forward
contracted rates where the premium or discount arising at the inception of such forward exchange contract is amortised as
expense or income over the life of the contract.
Exchange differences on forward contracts are recognised in the Profit and Loss Account in the reporting period in which
the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward contracts is recognised as
income or expense for the year.
40
Annual Report 2008
NOTES TO ACCOUNTS
SCHEDULE 14
f Employee Benefits
Gratuity
The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The
Company has an Employees Gratuity Fund managed by ICICI Prudential Life Insurance Company Limited. The Company
accounts for the liability of Gratuity Benefits payable in future based on an independent actuarial valuation.
Superannuation
The Company makes contribution to the Superannuation Scheme, a defined contribution scheme, administered by ICICI
Prudential Life Insurance Company Limited, based on a specified percentage of eligible employees salary. The Company's
obligation to the scheme is restricted to the contributions to the scheme.
Leave Encashment/ Compensated Absences
The Company provides for the encashment of leave with pay subject to certain rules. The employees are entitled to
accumulate leave subject to certain limits, for future encashment/ availment. The liability is provided based on the number
of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation.
Provident Fund
Contributions payable in respect of Provident Fund, which is a defined contribution scheme, is charged to the Profit and
Loss account. Refer Note 14 (i).
g Revenue Recognition
Sales are recognised when goods are despatched in accordance with the terms of sale and significant risks and rewards are
transferred and are recorded net of sales returns, trade discount, rebates and sales tax collected but includes excise duty,
where applicable, interest and other income is accounted for on accrual basis except items of non recurring nature which
are accounted when received.
h Expenditure
Expenses are accounted for, on accrual basis and provision is made for all known losses and liabilities.
Excise duty and customs duty are accrued on the goods lying in the bonded warehouse at the year end.
Revenue expenditure on Research and Development is charged against the profit of the year in which it is incurred. Capital
expenditure on research and development is shown as an addition to fixed assets.
i Leases
A lease is classified as an Operating Lease, if it does not transfer substantially all the risks and rewards incident to ownership.
Lease rentals are charged to Profit and Loss Account on straight-line basis over the lease term, estimated by the management.
j Taxation
Taxes on income for the current year are determined on the basis of provisions of Income Tax Act, 1961.
Deferred Tax is recognized on timing differences between the accounting income and the taxable income for the year and
quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.
Deferred Tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient
future taxable income will be available against which such deferred tax asset can be realised.
Fringe Benefit Tax is determined at current applicable rates on expenses falling within the ambit of'Fringe Benefit', as
defined under Income Tax Act, 1961.
k Provisions
Provisions are recognised when the company has a present obligation as a result of past events, it is probable that an
outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the
company expects a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when
reimbursement is virtually certain.
I Impairment
At the Balance Sheet date the company assesses whether there is any indication that an asset may be materially impaired.
If such an indication exists, the company estimates the recoverable amount. If the carrying amount of the asset exceeds its
recoverable amount, an impairment loss is recognised in the Profit and Loss Account to the extent carrying amount exceeds
the recoverable amount.
m Earnings per Share
Annualised Basic earning per equity share is arrived at based on net profit/(loss) after taxation to the basic/weighted
average number of equity shares.
41
3M India Limited
NOTES TO ACCOUNTS
SCHEDULE 14
2008 2007
Rs. Rs.
2 Contingent Liabilities not provided for :

a) Guarantees:
- issued by Company's Bankers 27,605,733 20,994,133
b) Letter of credit opened by banks for purchase of inventory / capital goods - 2,436,828
c) Claims against the Company not acknowledged as debts:
- Customs Demands 3,119,000 3,119,000
- Employees State Insurance claim 1,940,000
- Income Tax matter 23,124,330 -
d) Sales Tax matters 83,052,912 60,590,250

3 Capital expenditure commitments (net of advances) 117,510,918 404,109,071
4 Quantitative Information in respect of goods manufactured and traded by the Company

A. Particulars of Capacity and Production:
Licensed Installed Production

Class of Goods Unit Capacity Capacity
[Note (iii)] [Note(i)]
Self Adhesive Labels Nos NA 50,000,000 47,140,296

(40,000,000) (33,596,758)
Epoxy Resin Kgs NA 23,000,000 3,704,564
(23,000,000) (2,464,656)
Paper and Paper Tapes Nos NA NA 28,831,643
(26,192,548)
Paint Polishes Nos NA NA 2,851,750
(1,547,542)
Abrasives Nos NA NA 45,219,169
(53,821,238)
Notes:
i) Installed capacity is as certified by the management and relied upon by the auditors without verification as this is a technical
matter.
ii) Figures in brackets relate to the previous year.
iii) Includes products which are non standard having various sizes and measurement.
42
Annual Report 2008
NOTES TO ACCOUNTS
SCHEDULE 14
B. Particulars of Opening and Closing Stock of Stocks in Trade
Class of Goods Unit* Opening Stock Closing Stock

Quantity Value Quantity Value
Rs. Rs.
Manufactured
Self Adhesive Labels Nos 3,607,712 30,816,601 4,526,782 58,634,963
(2,835,01 7) (20,539,092) (3,607,712) (30,816,601)
Epoxy Resin Kgs 21,723 2,772,147 7,726 1,079,238

(54,857) (6,909,756) (21,723) (2,772,147)
Paper and Paper Tapes Nos 1,526,018 20,356,659 1,410,932 30,101,319

(2,059,165) (20,131,146) (1,526,018) (20,356,659)
Paint Polishes Nos 224,484 10,788,358 199,099 12,329,690

(325,443) (10,080,761) (224,484) (10,788,358)
Abrasives Nos 4,028,823 21,832,525 4,754,611 34,211,763

(6,413,725) (32,647,441) (4,028,823) (21,832,525)
Others (individually less than 10% of the total stock) 43,869,318 63,292,671
(27,745,607) (43,869,318)
130,435,608 199,649,644
(118,053,803) (130,435,608)
Traded
Self Adhesive Labels Nos 13,835 84,945,177 102,247 92,508,104
(9,683) (24,748,405) (13,835) (84,945,177)
Surgical and Dental Products Nos 273,269 62,345,953 341,526 91,588,476

(156,658) (55,087,538) (273,269) (62,345,953)
Paint Polishes Nos 133,270 15,779,471 150,992 20,356,802

(469,283) (29,055,187) (133,270) (15,779,471)
Abrasives Nos 8,193,022 57,396,047 7,419,731 88,609,244

(2,479,403) (43,490,588) (8,193,022) (57,396,047)
Others (individually less than 1 0% of the total stock) 44,952,089 105,160,517

(98,795,505) (44,952,089)
265,418,737 398,223,143
(251,177,223) (265,418,737)
Note: Figures in brackets relate to the previous year

* includes products which are non standard having various sizes and measurement
43
3M India Limited
NOTES TO ACCOUNTS
SCHEDULE 14
C. Particulars of turnover
Class of Goods Unit* Turnover

Quantity Value
Rs.
Self Adhesive Labels Nos 46,628,856 1,889,155,530

(33,007,225) (1,758,767,450)
Surgical and Dental Products Nos 12,453,564 1,118,938,618

(1,338,946) (806,265,955)
Epoxy Resin Kgs 3,718,561 552,733,193

(2,497,790) (523,374,547)
Paper and Paper Tapes Nos 28,946,729 856,955,576

(26,725,695) (698,224,467)
Paint Polishes Nos 3,985,823 484,676,280

(2,321,968) (340,666,188)
Abrasives Nos 97,618,945 1,275,865,164

(81,836,228) (1,130,405,231)
Others (individually less than 10% of the total turnover) 1,248,267,357

(847,874,548)
7,426,591,718
(6,105,578,386)
D. Particulars of Purchase of Traded Goods
Class of Goods Unit* Quantity Value

Rs.
Self Adhesive Labels Nos 496,044 518,042,502

(187,314) (502,780,313)
Surgical and Dental Products Nos 12,521,821 758,486,266
(1,455,557) (427,392,336)
Paint Polishes Nos 1,126,410 128,818,118
(337,454) (80,175,306)
Abrasives Nos 52,352,273 418,851,037
(31,343,707) (311,994,538)
Others (individually less than 10% of the total turnover) 1,070,169,858
(577,773,366)
2,894,367,781
(1,900,115,859)
Note: Figures in brackets relate to the previous year
* includes products which are non standard having various sizes and measurement
2008 2007
Rs. Rs.
5 Auditors Remuneration*
(Included under legal and professional charges in schedule 13)
(excluding service tax)
- Audit fees 2,050,000 1,700,000
- Tax Audit Fees 600,000 600,000
- Certification and other services 1,160,000 1,450,000
- Reimbursement of expenses 57,814 89,325
* excluding service tax
44
Annual Report 2008
NOTES TO ACCOUNTS
SCHEDULE 14
2008 2007
Rs. Rs.
6 Value of imports on C.I. F basis:
(excluding Goods in transit)
- Raw Materials 1,173,318,639 796,288,428
- Traded Goods 1,959,093,221 1,173,926,394
- Stores and Spares 5,376,364 6,293,297
- Capital Goods 151,051,275 32,310,008
7 Expenditure in Foreign Currency
- Travelling Expenses 14,411,059 17,693,710
- Others (net of tax) 97,957,946 74,904,748
8 Raw Materials Consumed
2008 2007
Class of Goods Unit Quantity Value Quantity Value
Rs Rs
Abrasives Linear Yard 413,908 128,412,337 380,424 78,407,883
Films Linear Yard 673,777 171,714,632 916,846 225,036,240
Films Rolls 43,974 195,778,064 32,288 161,440,402
Inks Gallons 41,228 78,602,732 110,591 115,696,202
Tapes Numbers 5,779,325 353,557,320 3,615,201 187,758,151
Epoxy Kilograms 2,731,791 281,160,579 2,786,563 354,311,372
Paint Polishes Gallon 198,260 35,298,947 1 25,499 38,076,397
Dyneon Sq Mtr 349,305 60,189,460 93,293 30,374,378
Others (individually less than 10% of
the total material consumed) 281,277,276 191,567,253
1,585,991,347 1,382,668,278
2008 2007
% Value % Value
Rs. Rs.
9 Value of Imported and Indigenous Raw Material

and Stores and Spares consumed
(As certified by the Management)
Raw Materials
Imported 83% 1,316,372,818 71% 981,694,478
Indigenous 17% 269,618,529 29% 400,973,800
1 00% 1,585,991,347 100% 1,382,668,278

Stores and Spares
Imported 25% 7,535,268 9% 2,379,986
Indigenous 75% 22,605,804 91% 24,064,298
100% 30,141,072 100% 26,444,284
2008 2007
Rs. Rs.
10 Earnings in Foreign Exchange:

Export of goods calculated on FOB basis 42,284,005 39,140,519
Freight and Insurance on exports 1,599,144 1,753,162
45
3M India Limited
NOTES TO ACCOUNTS
SCHEDULE 14
2008 2007
Rs. Rs.
11 Research and Development Expenses:

Recurring Expenses 7,036,465 3,928,330
Capital Expenditure 14,757,362 13,241,302
12 Disclosure of dues / payments to Micro, Small and Medium enterprises to the extent such
enterprises are identified by the company.
(a) (i) The principal amount remaining unpaid as at year end 1,208,164 742,147
(ii) Interest due thereon remaining unpaid as at year end 289,984 186,601
(b) The amount of interest paid by the buyer in terms of section 16 of the Micro, Small
and Medium Enterprises Development Act, 2006, along with the amount of the
payment made to the supplier beyond the appointed day during each accounting year:
(i) Delayed payment of principal amount paid beyond the appointed date during
the entire accounting year.
(ii) Interest actually paid under Section 16 of the act, during the entire accounting year.
(c) The amount of interest due and payable for the period of delay in making payment
(which have been paid but beyond the appointed day during the year) but without
adding the interest specified under the Micro, Small and Medium Enterprises
Development Act, 2006
(d) The amount of interest accrued and remaining unpaid as at year end
(i ) Total interest accrued during the year 180,177 143,319
(ii )Total Interest remaining unpaid out of the above as at year end.
(e) The amount of further interest remaining due and payable even in the succeeding
years, until such date when the interest dues as above are actually paid to the
small enterprise, for the purpose of disallowance as a deductible expenditure
under section 23 of the Micro, Small and Medium Enterprises Development Act, 2006. 109,807 43,282
Notes : The above information has been determined based on vendors identified by the
company and confirmed by the vendors, which have been relied upon by the auditors.
13. The Company has not made provision for warranty in respect of certain goods considering
that the company can claim the warranty cost from the original supplier.
14. Employee Benefits

i) The company has recognised, in the profit and loss account for the year ended
December 31,2008 an amount of Rs. 66,619,532 (2007: Rs.53,516,500) under defined
contribution plans.
Benefits (Contribution to)
Provident Fund 31,144,302 25,102,958
Superannuation Fund 34,650,248 27,804,381
Employee State Insurance Corporation 824,982 609,161
Total 66,619,532 53,516,500
ii) The company operates post retirement defined benefit plan for retirement
gratuity which is funded.
iii) Details of the post retirement gratuity plan are as follows:
I Reconciliation of opening and closing balances of obligation
a. Obligation as at the beginning of the year 47,620,641 37,325,535
b. Current Service Cost 6,885,210 5,291,544
c Interest Cost 4,286,227 2,883,631
d. Actuarial (Gain)/Loss 21,087,476 3,632,777
e. Benefits Paid (7,743,571) (1,512,846)
f. Obligation as at the end of the year 72,135,983 47,620,641
46
Annual Report 2008
NOTES TO ACCOUNTS
SCHEDULE 14
2008 2007
Rs. Rs.
II Change in Plan Assets (Reconciliation of opening and closing balances)
a. Fair Value of Plan Assets as at the beginning of the year 39,011,426 26,076,379
b. Expected return on Plan Assets 3,119,799 2,030,426
c Actuarial Gain/(Loss) (465,581) 146,031
d. Contributions 13,836,086 12,271,436
e. Benefits Paid (7,743,571) (1,512,846)
f. Fair Value of Plan Assets as at the end of the year 47,758,159 39,011,426
III Reconciliation of fair value of assets and obligations

a. Present Value of Obligation as at the beginning of the year 72,135,983 47,620,641
b. Fair value of Plan Assets as at the end of the year (47,758,159) (39,011,426)
c. Amount recognised in the Balance Sheet 24,377,824 8,609,215
IV Expense recognised during the year

a. Current Service Cost 6,885,210 5,291,544
b. Interest Cost 4,286,227 2,883,631
c Expected return on Plan Assets (3,119,799) (2,030,426)
d. Actuarial (Gain)/Loss 21,553,057 3,486,746
e. Expense recognised during the year 29,604,695 9,631,495
The expense is disclosed in the line item-Contribution to provident and other funds.
V Assumptions
a. Discount Rate (per annum) 5.70% 8.15%
b. Interest Rate (per annum) 7.50 % 7.50%
c Estimated Rate of return on Plan Assets (per annum) 7.50% 7.50%
d. Rate of Escalation in Salary (per annum) 5.00% 5.00%
Note: 1) The estimates of future salary increases, considered in actuarial valuation take account of inflation, seniority, promotion
and other relevant factors such as supply and demand in the employment market.
2) As per management estimate, contribution of Rs. 15,000,000 is expected to be paid to the plan during the year ending
December 31,2009.
15. (a) Managerial Remuneration paid by the Company *

Salary and Allowances 12,963,170 14,061,712
Contribution to Provident and other funds 742,037 543,416
Estimated value of benefits 2,858,780 3,432,562
16,563,987 18,037,690
Excluding contribution to gratuity fund and provision for leave encashment
b) Computation of profit in accordance with Section 198(1) read with Sec 309(5) of the
Companies Act, 1956 for calculation of Managerial Remuneration
Profit before Taxation (as per books) 910,228,094 1,066,284,650
Add: 1. Managerial Remuneration 16,563,987 18,037,690
2 Depreciation charged in the accounts 72,292,207 58,922,643
3. Provision for doubtful debts 6,123,500 -
4 Loss on sale of Fixed Assets (net) - 3,022,149
5. Directors sitting fees 780,000 780,000
1,005,987,788 1,147,047,132
47
3M India Limited
NOTES TO ACCOUNTS
SCHEDULE 14
2008 2007
Rs. Rs.
Less: 1. Depreciation as per Section 350 of the Companies Act, 1956 72,292,207 58,922,643
2 Profit on sale of Fixed Assets (net) 6,412,634
3. Provision for doubtful debts and advances written back 24,322,380 18,315,585
103,027,221 77,238,228
Profit as per Section 198 of the Companies Act, 1956 902,960,567 1,069,808,904
10% of the above (2007: 10%) 90,296,057 106,980,890
Remuneration paid during the year 16,563,987 1 8,037,690
Note : Mr. Ajay Nanavati was appointed as Managing Director on October 1,2008 and the Company has applied for approval from Central Government
with respect to residential status as per Part 1 (e) of Schedule XIII of the Companies Act, 1956 and the approval is awaited. The above said
appointment is subject to approval from Shareholders in the ensuing Annual General Meeting.
16. Related Party Transactions

(A) Summary of the monetary value of the transactions with the related parties are as follows:
Holding Fellow Key Total
Company Subsidiaries Management
[B(i>] [B(ii)l [B(iii)]
Rs. Rs. Rs. Rs.
L Expenses:
ia. Purchase of Materials 911,331,818 1,782,181,081 2,693,512,899
(822,618,365) (909,609,171) (1,732,227,536)
ib. Sales promotion expenses 448,606 559,613 1,008,219
(205,194) (283,462) (488,656)
ic. Remuneration to Directors - - 16,563,987 16,563,987
- - (18,037,690) (18,037,690)
id. Other Services - 92,619,690 92,619,690
- (74,195,023) (74,195,023)
1
II. Income
iia. Sale of Goods 204,588 42,079,417 42,284,005
(508,932) (38,017,618) (38,526,550)
iib. Reimbursement of Cross Charges / Expenses - 20,087,168 20,087,168
- (18,632,524) (18,632,524)
III. Purchase of Capital Goods 22,869,364 14,845,752 37,715,116
(202,871) (182,413) (385,284)
IV. Balances
iva. Advance Received 76,675,093 - 76,675,093
(76,675,093) - (76,675,093)
ivb. Outstanding receivables 667,055 35,161,635 35,828,690
(1,098,479) (29,777,906) (30,876,385)
ivc. Outstanding payables 103,468,261 180,878,972 284,347,233
(99,797,852) (200,414,522) (300,212,374)
ivd. Capital Advances Paid - - -
(5,915,400) - (5,915,400)
Notes:
1. The above does not include related party transactions with retiral funds, as key rnanagement personnel who are
trustees of the funds cannot individually exercise significant influence on the retiral funds transactions.
The above information has been determined to the extent such parties have been identified on the basis of
information available with the Company and relied upon by the auditors.
Figures in brackets relates to the previous year.
48
Annual Report 2008
NOTES TO ACCOUNTS
SCHEDULE 14
Disclosure of transactions which are more than 10% of the total transactions of the same type with related parties during the year.
Relationship 2008 2007

Rs. Rs.
Sale of Goods
3M Italy Fellow Subsidiary 15,429,408 138,409
3M Gulf Ltd Fellow Subsidiary 9,689,729 27,650,180
3M Lanka Ltd Fellow Subsidiary 7,420,842 6,956,880
3M Indonesia Ltd Fellow Subsidiary 4,673,505 1,233,233
Reimbursement of Cross Charges / Expenses

3M Electro & Communication India Private Ltd Fellow Subsidiary 20,087,168 18,632,524
Sales Promotion Expenses

3M Taiwan Ltd Fellow Subsidiary 307,461 195,391
Sumitomo 3M Ltd Fellow Subsidiary 248,231 50,433
Remuneration to Directors
Mr. Bert O' Donoghue Key Management Personnel 8,030,566 11,999,713
Mr. Ajay Nanavati Key Management Personnel 2,371,015
Mr. B.V. Shankaranarayana Rao Key Management Personnel 6,162,406 6,037,977
Purchase of Capital Goods

3M Taiwan Limited Fellow Subsidiary 5,669,336 182,413
3M Canada Company Fellow Subsidiary 9,070,093
Outstanding receivables
3M Italia S.p.A. Fellow Subsidiary 3,977,073
3M Gulf Ltd Fellow Subsidiary 10,058,407
3M Electro & Communication India Private Ltd Fellow Subsidiary 19,434,815 28,437,152
Outstanding Payables
Sumitomo 3M Ltd Fellow Subsidiary 31,628,243 32,235,708
3M United Kingdom PLC Fellow Subsidiary 51,665,047 1,696,630
Purchase of Materials
3M Asia Pacific Pte Ltd Fellow Subsidiary 228,940,518 98,830,570
3M Health Care Ltd - Japan Fellow Subsidiary 198,627,146
3M Korea Fellow Subsidiary 202,150,093 122,061,233
Sumitomo 3M Ltd Fellow Subsidiary 312,408,481 191,334,419
Other Services
3M Asia Pacific Pte Ltd Fellow Subsidiary 92,619,690 74,195,023
49
3M India Limited
NOTES TO ACCOUNTS
SCHEDULE 14
(B) Names of related parties and description of the relationship:
(i) Parties where control exists
Holding Company 3M Company, St Paul, USA
(ii) Fellow Subsidiaries:
3M (East) A.G. 3M Optical System Mfg. Co.
3M (New Zealand) Ltd 3M Philipines Inc
3M (Schweiz) A.G. 3M Poland Spz.o.o.
3MA/S 3M Precision Optics, Inc.
3M Ait Ltd 3M Puerto Rico, Inc.
3M Argentina S.A.C.I.F.I.A. 3M Russia
3M Asset Management S.a.r.l. 3MSanayiVETicaretAS
3M Australia Pty. Ltd 3MSante
3M Belgium S.A./N.V. 3MSanvetec
3M Canada Company 3M Singapore Private Ltd
3M China Ltd 3M South Africa (Proprietary) Ltd
3M Corporate Services B.V. 3M Spain
3MDeutschlandGmbH 3MSvenskaAB
3MdoBrasilLtd 3M Sweden
SMEccEuropaBV 3MTaiwan Ltd
3M Electro & Communication India Private Ltd 3M Taiwan Optronics Corp.
3MEspana,S.A. 3M Technologies Private Ltd
3MESPEAG 3M Telecommunications, Pouyet
3M Europe S.A. 3MThailand Ltd
3M Financial Management Company 3MTouch Systems, Inc.
3M France, S.A. 3M Traffic Safety Material
3M German Holdings GmbH 3M Turkey
3M Global Capital S.a.r.l. 3M United Kingdom Holdings PLC
3M Gulf Ltd. 3M United Kingdom PLC
3M Health Care Ltd. 3M Unitek Corporation
3M Health Information Systems, Inc. 3M Vietnam
3M Hellas Ltd 3MUnitekGmbH
3M Hong Kong Ltd CUNO Engineered Products, Inc.
3M Indonesia Kbyt CUNO Filtration Asia Pte. Ltd.
3M Innovative Properties Company CUNO Filtration SAS
3M International Group B.V CUNO Incorporated
3M International Trading (Shanghai) Co., Ltd. CUNO Pacific Pty Ltd.
3M Investment Management Corporation Dyneon GmbH & Co. KG
3M Italia S.p.A. Dyneon LLC
3M Korea Health and Safety Ltd HighJump Software, LLC
3M Korea Ltd Kyuno Kabushiki Kaisha Sumitomo
3M Limited Laboratories 3M Sante SAS
3M Malaysia SON. BHD Nadco Japan Ltd
3M Manufacturera Venezuela, S.A. Riker Laboratories, Inc.
3M Material Technology Co., Ltd. Seaside Insurance Limited
3MMexico,S.A.deC.V. Security Printing and Systems Ltd.
3M Netherland B.V. Sumitomo 3M Ltd
3M New Zealand Ltd Suomen3MOy
3MNorgeA/S Yamagata3MLtd
3M Oesterreich GmbH 3M Asia Pacific Pte Ltd
3MAUSTBIOTRACE 3MBRCKNELL
3M Film Construction (Shangai) Company Ltd 3M Korea Hightech Ltd
3M International Trading (Shenzen) Company Ltd 3M Lanka Private Ltd
3M International Trading (Tianjin) Company Ltd 3M Pakistan (Private) Ltd
3M South Africa (Proprietary) Ltd 3M Pharmaceuticals Pty Ltd
(iii) Key Management Personnel Mr. Bert O'Donoghue (up to September 30,2008)
Mr. AjayNanavati(w.e.f October 1,2008)
Mr.B.V.Shankaranarayana Rao
Notes: None of the relatives of the Directors of the Company have any interest in any companies, firms, body corporate with which transactions
have been entered into during the year.
The above information has been determined to the extent such parties have been identified on the basis of information
provided by the Company, which has been relied upon by the auditors.
50
Annual Report 2008
NOTES TO ACCOUNTS
SCHEDULE 14
17. Assets taken on lease

The company has taken office premises, warehouse, residential premises, vehicles and office equipment under operating lease
agreements that are renewable on a periodic basis at the option of both the lessor and lessee. The initial tenure of the lease is
generally for eleven months to ninety six months. The minimum rental payments under the operating leases under
non-cancellable lease term as at December 31, 2008 is as under:
2008 2007
Rs. Rs.
Lease rental charged to profit and loss account 176,798,898 144,738,548
Minimum lease payments not later than one year 107,725,848 101,051,568
Minimum lease payments later than one year but not later than five years 332,860,769 318,567,960
Minimum lease payments later than 5 years 105,736,400 182,349,456
The company has entered in an agreement for sublease of office premises.
The sublease is for a term of three years, expiring on October 31, 2010. The future
minimum lease under this sub-lease agreement is as under:
Minimum lease rentals upto one year 10,817,886 10,302,750
Minimum lease rentals later than one year but not later than five years 10,368,996 21,186,882
Minimum lease rentals later than five years
18. Taxation
a) The tax year for the Company being March 31, the provision for taxation for the year is the aggregate of the provision made
for the 3 months ending March 31, 2008 and the provision based on the figures for the remaining 9 months upto December
31, 2008. The ultimate tax liability will be determined on the basis of the figures for the period April 1, 2008 to March 31, 2009.
b) Accounting for taxes on Income disclosure as per Accounting Standard 22. Major components of Deferred tax assets and
liabilities on account of timing differences as at December 31, 2008 are :
Asset Liability
2008 2007 2008 2007
Rs. Rs. Rs. Rs.
Depreciation 31,264,567 15,281,309

Provision for doubtful debts 14,817,890 21,196,133
Provisions allowed on payments, write off 67,695,434 37,340,783
82,513,324 58,536,916 31,264,567 15,058,309
Net Deferred Tax Asset 51,248,757 43,255,607
Net Deferred Tax (Credit) / Debit for the year (7,993,150) (6,747,403)
The tax impact for the above purpose has been arrived by applying a tax rate of 33.99% (2007 : 33.99%) being the prevailing tax
rate for Indian companies under the Income Tax Act, 1961.
19. In accordance with Accounting Standard -29 on Provisions, Contingent Liabilities and Contingent Assets, as notified u/s 211(3C) of the
Companies Act, 1956, certain classes of liabilities have been identified as provision and accordingly regrouped separately as under:
Particulars 2007 Additions Reversals 2008
Rs. Rs. Rs. Rs.
Sales Tax 17,472,194 4,775,000 22,247,194
Other Payables 5,700,000 4,807,000 893,000
The company sets up and maintains provisions for other trade payables when a reasonable estimate can be made. These
provisions are made based on estimates made by the management that are reviewed periodically and involve quick settlements
not exceeding a period of two-three years in most cases.
20. Earnings Per Share (EPS)
Profit attributable to Equity Shareholders 574,549,087 676,827,835
Weighted Average number of equity shares outstanding during the year 11,265,070 11,265,070
Nominal value of Equity share 10 10
Basic and Diluted Earnings Per Share 51.00 60.08
51
3M India Limited
NOTES TO ACCOUNTS
SCHEDULE 14
2008 2007
Rs Rs
21. Segment Report:
Segment Revenue (net sale / income)
a Industrial Markets 1,361,568,024 1,131,426,260
b Automotive and Specialty Materials Markets 2,490,229,067 2,164,636,710
c Health Care Markets 1,212,849,372 810,088,900
d Traffic and Safety Markets 1,467,560,960 1,222,028,624
e Consumer and Office, Construction Markets 852,100,290 737,638,342
f Others * 42,284,005 39,759,550
Total Segment Revenue 7,426,591,718 6,105,578,386
Less : Inter segment revenue
Net Sales / income from operations 7,426,591,718 6,105,578,386
Segment Results (Profit before interest and tax)
a Industrial Markets 116,828,474 192,423,609
b Automotive and Specialty Materials Markets 319,944,581 346,544,136
c Health Care Markets 43,040,479 29,496,688
d Traffic and Safety Markets 319,161,508 337,298,274
f Others 6,599,742 4,468,966
Total Segment Results 853,962,908 1,003,018,335
Less : Interest expense 4,666,971 3,387,000
Add: Other un-allocable income net off unallocable expenditure 60,932,157 66,653,315
Total Profit Before Taxation 910,228,094 1,066,284,650
Capital Employed (Segment Assets-Segment Liabilities)
a Industrial Markets 463,158,402 225,990,469
b Automotive and Specialty Materials Markets 1,356,837,534 766,094,294
c Health Care Markets 209,587,656 113,255,648
d Traffic and Safety Markets 424,995,526 267,803,944
f Others
Total Capital Employed in segments 2,507,607,628 1,451,931,683
Add: Unallocable corporate assets less corporate liabilities 969,946,780 1,451,073,638
Total Capital Employed by the Company 3,477,554,408 2,903,005,321
"includes
Domestic Sales/ Income - 619,031
Export Sales 42,284,005 39,140,519
Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17), taking into account the
organisation structure as well as the differential risks and returns of these segments.
Segment revenue, results and Capital employed figures include the respective amounts identifiable to each of the segments
and also amounts allocated on a reasonable basis. Other unallocable expenditure includes expenses incurred on common
services provided to the segments which are not directly identifiable to the individual segments as well as expenses incurred at
a corporate level which relate to the Company as a whole.
The Company operates mainly to the needs of domestic market and export turnover is not significant in context of total
turnover. Accordingly, there are no reportable geographical segments.
22. 3M Company, USA the holding company has offered an 'General Employees Stock Purchase Plan' to the employees of the
company. In accordance with the plan, the company during the year has deducted for remittance a sum of Rs 4,139,045
(2007: Rs. 6,748,341) and cumulatively amounting to Rs. 14,004,295 (2007 Rs: 9,865,250) from the salary of the employees who have
opted for the plan. As of the year end a sum of Rs. 265,773 (2007: Rs. 348,322) is pending remittance to the holding company and the
same is included under Other Liabilities (Schedule 9).The company has considered the same for necessary Fringe Benefit Tax.
23. Previous year's figures have been regrouped / reclassified wherever necessary to conform to current year classification.
For and on behalf of the board
Place : Bangalore Ajay Nanavati B.V.Shankaranarayana Rao K. Ramesh Chandra

Date : February 27,2009 Managing Director Whole-time Director Company Secretary
52
Annual Report 2008
CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2008
2008 2007
Rs. Rs.
A. Cashflow from Operating Activities
Profit before Taxation 910,228,094 1,066,284,650
Adjustment for
Depreciation 72,292,207 58,922,643
Provision for doubtful Advances 6,123,500 -
Provision for doubtful debts written back (net) (19,515,380) (10,277,769)
Balances / Provisions no longer requried (4,807,000) (8,037,816)
Unrealised Foreign Exchange Loss/(Gain) (8,460,830) 1 73,482
Profit on sale of Fixed Assets (net) (12,201,283) -
Loss on sale of Fixed Assets (net) - 3,022,149
Interest income (50,629,407) (53,802,733)
Interest expenses 4,666,971 3,387,000
Operating Profit Before Working Capital changes 897,696,872 1,059,671,606
Adjustment for
(Increase)/ Decrease in Inventories (384,028,716) (13,987,223)
(Increase)/ Decrease in Debtors (227,488,728) (195,480,009)
(Increase)/ Decrease in Loans and Advances (104,188,662) (98,360,020)
Increase/ (Decrease) in Current Liabilities and Provisions 190,072,264 161,079,913
Cash Generated from Operations 372,063,030 912,924,267
Direct Taxes paid (net of refund) (364,003,233) (419,496,919)
Net Cash flow from Operating Activities 8,059,797 493,427,348
B. Cash flow from investing activities
Purchase of Fixed Assets (516,378,743) (584,018,351)
Proceeds from Sale of Fixed Assets 22,488,002 2,695,879
Interest Received 54,478,918 54,013,483
Net cash from / (used in) investing activities (439,411,823) (527,308,989)
C Cash flow from financing activities
Interest Paid (3,721,512) (2,751,069)
Net cash from / (used in) financing activities (3,721,512) (2,751,069)
Net cash flows during the year (A+B+C) (435,073,538) (36,632,710)
Cash and cash equivalents (Opening Balance) 959,909,199 996,541,909
Cash and cash equivalents (Closing Balance) 524,835,661 959,909,199
Notes:
1 The above Cash Flow Statement has been compiled from and is based on the Balance Sheet as at December 31, 2008 and the
related Profit and Loss Account for the year ended on that date.
2 The above Cash Flow Statement has been prepared under indirect method in accordance with the Accounting Standard 3 as
notified u/s 211 (3C) of the Companies Act, 1956.
3 Cash and cash equivalent comprise of Cash and Bank Balance including a deposit under lien of Rs. 3,100,000 (2007 : Rs. 10,200,000)
4 Previous year's figures have been regrouped wherever necessary to confirm to current year's presentation.
This is the Cash Flow Statement referred to in our For and on behalf of the Board
report of even date
Usha A Narayanan AjayNanavati B.V.Shankaranarayana Rao K. Ramesh Chandra

Lovelock & Lewes
Place: Bangalore
53
3M India Limited
Information pursuant to Part IV of Schedule VI to the Companies Act, 1956
Balance Sheet Abstract and Company's General Business Profile
I. Registration Details
Registration No. 13543 State Code 08
Balance Sheet Date | 31 ^__ 12 2009

Date Month Year
II. Capital raised during the year (Amount in Rs. Thousands)
Public Issue Rights Issue
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Total Liabilities Total Assets
Sources of Funds
Paid-up Capital Reserves & Surplus
Secured Loans Unsecured Loans
Application of Funds
Net Fixed Assets* | 1433219 Investments
Net Current Assets** 1993086 Net Deffered Tax Assets
Includes capital work-in-progress
Net of current liabilities and provisions
IV. Performance of Company (Amount in Rs. Thousands)
Total Expenditure
Profit / (Loss) Before Tax Profit / (Loss) After Tax
Earning per Share (in Rs.) Dividend Rate (%)
V. Generic Names of Three Principal Products / Services of Companyfas per monetary terms)
Item Code. No. (ITC Code)
Product Description COATED ABRASIVES
Product Description MASKING TAPES
Product Description
Signature to Schedules 1 to 14
For and on behalf of the Board
Place : Bangalore Ajay Nanavati B.V.Shankaranarayana Rao K. Ramesh Chandra

Date : February 27,2009 Managing Director Whole-time Director Company Secretary
54
Annual Report 2008
3M INDIA LIMITED 3M INDIA LIMITED

Regd Office: 48-51, Electronics City, Hosur Road, Regd Office: 48-51, Electronics City, Hosur Road,
Bangalore - 560 100 Bangalore - 560 100
ATTENDANCE SLIP PROXYFORM
I/We.. ..of
..being a
Member/Members of above Company, hereby appoint
I hereby record my presence at the Annual General Meeting of of

the Company at The Chancery Pavilion, 135 Residency Road,
Bangalore 560025, at 10.30a.m. on Wednesday, April, 29, 2009 or failing him of
as my/our Proxy to attend and vote for me/us and on my/our

behalf at the Annual General Meeting of the Company,
Signature of the attending Member / Proxy : to be held on Wednesday, April, 29,2009 and at The Chancery
Pavilion, 135 Residency Road, Bangalore 560 025, at 10.30 a.m.
any adjournment thereof.
NOTE:
Signed.
1. Shareholders / Proxyholders wishing to attend the meeting
must bring the Attendence Slip to the meeting and handover
at the entrance, duly signed. day of 2009.
2. Shareholders / Proxyholders desiring to attend the meeting

should bring their copy of the Annual Report for reference Reference Folio
at the meeting.
No. of shares
NOTES:
The Proxy must be returned so as to reach the Registered
Office of the Company, 48-51, Electronics City, Hosur Road,
Bangalore - 560 100, in not less than FORTY-EIGHT HOURS
before the time for holding the aforesiad meeting.
55
Dematerialisation of Shares
Dear Shareholder,
We wish to inform that the shares of our Company.,3M INDIA LTD have been admitted for dematerialisation with Depositories.
The ISIN Number allocated to the Company's equity shares is INE470A01017. You may like to convert the shares now held by
you in physical form into electronic/demat form through any of the SEBI registered Depository Participants (DP's) any where in
India. The Following are the advantages of holding shares in electronic/demat form:
* No bad deliveries.
* Transfer of shares from one account to other account.
* Reduced Paper work.
* No risk of loss, mutilation or theft of share certificates.
* No stamp duty for transfer of shares in electronic mode.
* Regular account status updates available from the DP at any point of time.
In view of the above, you are requested to open depository account with any of the SEBI registered DP if not opened earlier and
submit your physical share certificate's through your DP for the purpose of converting from physical form to electronic form.
You may please,feel free to contact or write to our Registrar andTransfer Agents at the below mentioned address for any queries
or clarifications in this regard:
Karvy Computershare Private Limited

Plot no.17-24, Vithal Rao Nagar, Madhapur;
Hyderabad-500 034
Tel: 040-23420816 / 824 Fax: 040-23420814
E-mail:mailmanager@karvy.com Contact person: Mr.K. Subba Reddy
K.Ramesh Chandra
Company Secretary
3M India Limited
Plot no. 48-51, Electronic City
Hosur Road,
Bangalore - 560 100

Myriad Needs - QPG Solution!: 3M India Limited

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Myriad Needs - QPG Solution!: 3M India Limited

Uploaded by

Copyright:

Available Formats

SANSCO SERVICES - Annual Reports Library Services - www.sansco.

Myriad Needs.Qpg Solution!

Salary including allowances, incentives and perquisites:

By Order of the Board

Date : February 27, 2009 K. Ramesh Chandra

Explanatory statement u/s 173 (2) of the Companies Act, 1956

FOR RESOLUTION NO. 5

Additional information on Directors seeking re-appointment at the Annual General Meeting

Name of Director Mr. B.C. Prabhakar Mr. Richard Lee Becker

Age 65 Years 49 Years

Qualifications Bachelor of Arts and Bachelor of Law Master of Business Administration

Expertise Expertise in legal Finance and taxation

Directorships held in other Public Wipro Limited Nil

Memberships/Chairmanships of Wipro Limited

Shareholding of Directors Nil Nil

By Order of the Board

Date : February 27,2009 K. Ramesh Chandra

Message from the Managing Director 3

Report of the Directors 11

Management Discussion and Analysis 14

Report of the Corporate Governance 18

Annexure to Auditor's Report 30

Profit and Loss Account 33

Cash Flow Statement 53

Registered Office Corporate Office

Provide our investors an attractive return through sustainable, global growth.

I would like to remind everyone that we are poised to take on the

Our technology is focused on meeting local needs. Hence, localization has

Director I applaud & congratulate 3M employees

Brand Owner Services

Fiber Management System

For the last 20 years, every one of these products have

The 1100+ army of 3M India

3M in India. A Microcosm of 'Unity in Diversity'.

DIRECTORS Mr. D.J. Balaji Rao Chairman

COMPANY SECRETARY Mr. K. Ramesh Chandra

MEMBERS Mr. D.J. Balaji Rao

SHAREHOLDERS' Mr. D.J. Balaji Rao Chairman

This page is intentionally left free

Annual Report 2008

REPORT OF THE DIRECTORS

Particulars For the year ended For the year ended

Total Income 75,240.48 61,905.47

Less : Total Expenditure 65,415.28 50,653.40

Profit before Depreciation 9,825.20 11,252.07

Less : Depreciation 722.92 589.22

Profit before Taxation 9,102.28 10,662.85

Less : Provision for Taxation 3,356.79 3,894.57

Profit after Taxation 5,745.49 6,768.28

MATERIAL CHANGES AND COMMITMENTS

CONSERVATION OF ENERGYJECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

On behalf of the Board of Directors

Place : Bangalore AjayNanavati B.V.Shankaranarayana Rao

Annual Report 2008

B. TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

On behalf of the Board of Directors

Place : Bangalore Ajay Nanavati B.V.Shankaranarayana Rao

MANAGEMENT DISCUSSION AND ANALYSIS

a) INDUSTRY STRUCTURE AND DEVELOPMENTS

b) OPPORTUNITIES AND THREATS

c) SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE